Find the possible over/understatement of taxable income given the following:
Taxable income per tax return $60,000
Increase in mortgage payable $150,000
Increase (purchase) in real estate $700,000
Increase in cash on hand $30,000
Decrease in bank balance $10,000
Gift received $15,000 Personal living expenses $25,000
Income taxes paid $17,000
Increase in accounts receivable $220,000
Decrease in securities $35,000
Tax exempt interest received $1,000
Gifts made (paid) $8,000
Increase in inventory $5,000
Itemized deductions $28,000
Inheritance received $9,000
Sample Solution
