Canny Foods Co

question 9

Multiple Choice

Canny Foods Co. is considering three ways it could contribute to a local, qualified charity. First, it could give $10,000 in cash. Second, it could give stock it initially purchased two years ago for $8,000 but is now worth $12,000. Third, it could give items of inventory with a fair market value of $7,000 but with an adjusted basis of $3,000. Which of the following correctly describes the relation among possible charitable contributions in terms of amount deductible for tax purposes?

• A) Cash > Stock > Inventory.
• B) Stock > Cash > Inventory.
• C) Inventory > Stock > Cash.
• D) Inventory > Cash > Stock.

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Definitions:

Output Per Capita

The total value of all goods and services produced by an economy in a given period divided by the population size.

Per Capita Output

A measure of a country's economic output that divides the total gross domestic product (GDP) by its population.

Labor Force

The total number of people available for work, including both the employed and those unemployed but seeking employment.

Tax Rates

The percentage at which an individual or corporation is taxed by the government on income or profits.