Question

Troy incurs the following expenses in his business, an illegal gambling establishment:Salaries to employees $200,000Insurance expense 60,000Utilities expense 70,000Bribes to police 50,000His deductible expenses areA) $0.B) $200,000.C) $330,000.D) $380,000.

Answer 1

C

Step-by-step explanation:

The expenses which will be allowed for deduction are:

Salaries to employees is an expense which is allowable for deduction

Insurance expense is an expense which is allowable for deduction

Utilities expense is an expense which is allowable for deduction

But, the bribe to police cannot be a expense which is allowed for deduction.

Therefore, the aggregate amount will be

= Salaries + Insurance + Utilities

= $200,000 + $60,000 + $70,000

= $330,000

The correct option is C