Question

During the current year, Ashley Corporation charged the following payments to
miscellaneous expense:


Travel expense of $300 for the company president to offer
voluntary testimony at the state capital against proposed
legislation regarded as unfavorable to its business
Christmas gifts to 20 customers at $75 each
Contribution of $600 to local political candidate


The maximum deduction that Ashley can claim for these payments is
A. $800
B. $1,400
C. $1,800
D. $2,400

Answer 1

Answer:

option (D) $2,400

Explanation:

Data provided in the question:

Payments to  miscellaneous expense:

Travel expense =  $300

Total value of Christmas gifts = 20 × $75 = $1,500

Contribution to local political candidate = $600

Now,

The maximum deduction that Ashley can claim for these payments

= Travel expense + Total value of Christmas gifts + Contribution to local political candidate

= $300 + $1,500 + $600

= $2,400

Hence,

The correct answer is option (D) $2,400