Question

Donald operates an accounting firm and has an annual summer party for the employees and their families. He believes the party benefits his employees. The cost of the food and beverages served at the party is $5,500. Donald also pays a band $500 to play at the party. How much of the total cost can Donald deduct?

Answer 1

$6,000

Step-by-step explanation:

Total cost includes all that was expended on the party. This includes the cost of the food and the band.

Total cost = $5,500 + $500 = $6,000

I hope my answer helps you

Answer 2

$6000

Step-by-step explanation:

Accordingly, the costs associated with throwing a party for employees and their families (spouses and significant others) are fully deductible (100%) as long as the party is hosted primarily for the employees. In this case, the party is for the employees as it is seen to benefits them, thus, total cost Donald can deduct equals cost of beverages and food plus cost of band,

That is,

= 5500 + 500

=$6000