The City of Ogden Was Devastated by a Tornado in April

question 44

Essay

The City of Ogden was devastated by a tornado in April 2011,leaving many families in need of food,clothing,shelter,and other necessities.Betty contributed $500 to a family whose home was completely destroyed by the tornado.Jack contributed $700 to the family's church,which gave the money to the family.Discuss the deductibility of these contributions.

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Definitions:

Inventory

Goods or materials that a business holds for the purpose of resale or production.

Prepaid Insurance

An asset account that represents insurance paid in advance, which is expensed as it is used or over time.

Accounts Payable

A liability account on a company's balance sheet representing money owed to creditors for goods and services purchased on credit.

Inventory

Items held for sale in the ordinary course of business, as well as materials and components that will be used in the production of goods to be sold.