Please complete the book to tax reconciliation for the tax year on the
work paper provided. Please ensure you show any necessary workings on the
work paper. It is not sufficient to merely provide an answernumber
River Walk, Inc. River Walk" is an accrual based taxpayer which sells
components for the electronics industry. They are a private company and use the
accrual basis of accounting for book purposes. River Walk uses a calendar year
end.
During the year no employee received stock options nor did any employee receive
more than $ million.
Any accrued salaries and wages were paid by January The accrued
salaries and wages for paid by January were $ and for
were $ Employecs are not permitted to accruc vacation but must take it
by December each year or it is paid out to them at the end of the year, ie
before December
River Walk's experience with bad debts has resulted in accounting policy of
providing a reserve for doubtful debts of of sales for the year. This accounting
policy commenced this year. This ycar the company wrote off accounts in the
reserve of $
There were fixed asset additions for the year of $ and the company wants
to take bonus depreciation for the ycar. The company takes the bonus
depreciation each year.
River Walk uses the full inclusion method for the sale of their inventory.
Unearned revenue for the sales were $ at December and
$ at December There is no IRC $A adjustment required.
All travel expenses and employee benefits are accounted for under an accountable
plan.
The meals and entertainment expenses have been reviewed and are considered
ordinary, necessary and reasonable and meet all the substantiation requirements.
River Walk has a policy that all meals must be provided in a restaurant.
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The company wrote off warranty expense in the warranty reserve for the year of
$
