Baker Corporation is a calendar year taxpayer using the accrual method of accounting. In the current year, its
board of directors authorizes a $20,000 contribution to the Boy Scouts. Baker pays the contribution on March
12 of the next year. What is the maximum contribution allowed in current year? What is the maximum
contribution allowed in the next year? Explain your answer.
Owens Corporation donates inventory having an adjusted basis of $30,000 and an FMV of $100,000 to County
Hospital, which is a qualified public charity. What is the amount of Owen’s deduction? Explain your answer.
Rhynie Corporation uses the accrual method of accounting. Rhynie’s sole shareholder, Austen, uses the cash
method of accounting. Both taxpayers use the calendar year as their tax year. The corporation accrues a
$25,000 interest payment to Austen on December of the current year and makes the payment on March 10 of
the next year. What are the tax consequences of the transaction to both taxpayers in the current year and next
year? Explain your answer.
iority sector with the vision as ‘Provision of efficient, economical, comfortable and safe transport facility for the public in Punjab’. The stated objectives, in the MTDF 2013-16 are: i) To provide accessible and time saving travelling, ii) To develop environment friendly transport system, iii) To regulate, monitor and maintain a robust transport system in large cities of the province. The initiatives include encouraging private investment in urban transport sector in Public Private Partnership mode, provision of subsidy to the urban transporters to facilitate induction of new buses in the urban transport system and capacity building of the department through Transport Planning Unit. The current allocation for the sector is Rs. 6,360 Million. Public transport service delivery was done by government till late 1980s to an acceptable level. The successive governments continued to act as a service provider as well as a regulator. As of 2010, the population of Lahore was estimated at about 9.9 million most of which was concentrated in the center of Lahore, while rest of the areas are mostly rural except for narrow strips along arterial roads where the development has been mostly unplanned. With increase in population of Lahore (7.5 times since 1951) and gradual deterioration in infrastructure, rolling stock and capacity of the Transport Department, a vacuum started developin>GET ANSWER