1. Dr. Bill is an Audit partner at Deloitte’s Tyson's Corner office and was required to attend a conference in the California Bay Area due to one of his major clients, Microsoft, being affected by the new PCAOB standard. He will spend some extra time touring the Bay Area (8 days for business, 2 days for vacation). His costs were as follows: the roundtrip flight was $2,200, transportation to the airport was $150, the car rental was $400, business meals were $100, and lodging was $2,400. What is Deloitte's deduction for Dr. Bill's business and relaxation trip?

2. Daniel operates a sole proprietorship that provides IT services for small businesses. For tax preparation, he uses the cash method of accounting, and this year he received the following payments:

• $120,000 in cash from a customer for services rendered this year
• A promise from a customer to pay $2,000 for services rendered this year
• Tickets to a Broadway play worth $250 as payment for services performed last year
• A check for $1,000 for services rendered this year, which Daniel forgot to cash
• Daniel received $700 paid in cash for a one-day job but did not deposit in his bank. He immediately spent the $700 dollars for his daughter birthday

How much income should Daniel recognize on his Schedule C?

Answer rating: 100% (QA)

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