Canny Foods Co

question 93

Multiple Choice

Canny Foods Co.is considering three ways it could contribute to a local,qualified charity.First,it could give $5,000 in cash.Second,it could give stock it initially purchased two years ago for $4,000 but is now worth $6,000.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.

---

Definitions:

Model Business Corporation Act

A comprehensive statute that serves as a guideline for states in the United States to standardize and regulate the formation, operation, and dissolution of corporations.

Maximum Potential

The highest achievable or possible level of performance or success.

Corporate Veil

A legal concept that separates the personality of a corporation from the personalities of its shareholders, protecting them from being liable for the company's debts.

Creditor

A person or institution that lends money or extends credit to another party, expecting to be repaid in the future.