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frosja888 [35]
3 years ago
9

Ignacio and Perla are married and both are government employees. They contribute 22) money to various organizations each year an

d file a joint return. Their adjusted gross income for 2018 is $100,000. They contributed to the following organizations in 2018:
$3,500 to the World Wildlife Foundation
$10,000 to the Salvation Army
$2,000 to a local city council candidate
$11,000 to a breast cancer research hospital
Donated clothing to Goodwill. (Ignacio purchased the items for $375, but the thrift shop value of the same items at a local second-hand store is equal to S60.)
How much can Ignacio and Perla deduct as charitable contributions for the year 2018?
A) $26,560.
B) $25,710
C) $26,500.
D) S24,560.
Business
1 answer:
yKpoI14uk [10]3 years ago
3 0

Answer: D. $24,560

Explanation:

The contributions to charity and the clothing to Goodwill can be considered charitable deductions but the goodwill clothing must be value at second-hand value.

= Donation to WWF + Salvation Army + Breast Cancer research + Goodwill

= 3,500 + 10,000 + 11,000 + 60

= $24,560

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\left[\begin{array}{ccc}$Account&$DEBIT&$CREDIT\\$Cash&37,600&-\\$Prepaid insurance&4,600&\\$Office supplies&890&-\\$office equipment&12,900&\\$accouts payable&-&12,900\\$Capital Account&&18,000\\$drawins&3,370&\\$Sales revenue&&36,000\\$Rent expense&7,540&\\$Total&66,900&66,900\\\end{array}\right]

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                    (4,600)

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36,000

<u>                     (3,370)</u>

37,600

Assets and expenses goes into debit column

Liabilities, equity and revenues into credit column

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