John Mason is the owner and president of Digital Imagery and More Ltd., a company in the multimedia industry. The revenue of the business is about $ 20 million a year. In the past few years, John has spent the following: Swimming pool built at his home: $40 000 Renovations to his cottage: $7500 • Landscaping around his home: $4000 Although each of these expenditures was of a personal nature, Mason requested that invoices for the charges be sent to his company, Digital Imagery and More Ltd. All of the expenditures were recorded in the books of the company in various expense accounts. a. As his accountant, what will you advise John to do? In your answer, be sure to include accounting principles and CPA Code of Conduct reference.

John Mason is the owner and president of Digital Imagery and More Ltd., a company in the multimedia industry. The revenue of the business is about $ 20 million a year. In the past few years, John has spent the following: Swimming pool built at his home: $40 000 Renovations to his cottage: $7500 • Landscaping around his home: $4000 Although each of these expenditures was of a personal nature, Mason requested that invoices for the charges be sent to his company, Digital Imagery and More Ltd. All of the expenditures were recorded in the books of the company in various expense accounts. a. As his accountant, what will you advise John to do? In your answer, be sure to include accounting principles and CPA Code of Conduct reference.

Individual Income Taxes

43rd Edition

ISBN:9780357109731

Author:Hoffman

Publisher:Hoffman

Chapter9: Deductions: Employee And Self- Employed-related Expenses

Section: Chapter Questions

Problem 37P

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