Fast-forward a year. For the first year as a C-Corp. Joe had the following items but he doesnt know if they are included in the calculation of total corporate income. Calculate Be You Sailing Corps gross income.

Gross Receipts - $24,000,000, Dividends $100,000 (from a Corporation they acquired this year to help with Catering on the boats), Cost of Goods Sold $125,000 from the clothing line we sale in the dock shop, Gross Rents $250,000, Capital Gain $200,000 from sale of an investment purchased this year, Returns $300,000 we had a couple of big charter sessions that didnt go as planned so we had to give those customers a return.

11. Total Income

	a.	24,550,000
	b.	24,425,000
	c.	24,125,000
	d.	24,250,000
	e.	24,125,000

In the last scenario Joe mentioned that Cost of Goods Sold was $125,000 for the year. But you are not sure how he got that number. Please advise Joe and by selecting the method(s) he is allowed to use to determine the value of his Cost of Goods Sold as $125,000. (More than one answer can be chosen)

		Weighted average
		Rolling Average
		Cost Method
		Lower of Cost or Market
		Retail method
		Last in First Out (LIFO)

Joe would really like to reduce the Corporations taxable income for this first year. Can he deduct (deductible whether in partial or in whole) the following items?

A. Both Deductible B. Both Non-deductible

C. Deductible, Non Deductible D. Non-deductible, Deductible

1. Depreciation of Boats used in the business -- Charitable Contribution of $100,000 to Public Childrens Hospital ____

2. Start-up costs of $20,000 -- Kickback from Supplier contract $100,000 ______________

3. Federal Payroll taxes $147,600 -- Net Capital Loss $15,000 (excess loss after netting with Capital gains). _______