Question: Eclipse, Inc., a qualifying small taxpayer, has total gross receipts of $3,600,000 and DPGR of $2,160,000. In addition Eclipse has cost of goods sold of

Eclipse, Inc., a qualifying small taxpayer, has total gross receipts of $3,600,000 and DPGR of $2,160,000. In addition Eclipse has cost of goods sold of $1,000,000 and advertising and administrative expenses of $480,000. (Ignore any taxable income and W-2 wage limitations.)

a. Using the small business simplified overall method, determine Eclipse’s allowable cost of goods sold and its allowable allocable expenses.

b. Determine Eclipse’s QPAI and DPAD.

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