I completed everything except for the last part I know my answers are right because i double checked but i just dont know how to answer the last section Problem 3 1 Schedule C (LO 3 1) Scott Butterfield is self employed as a CPA He uses the cash method of accounting, and his Social Security number is 644 47 7833 His principal business code is 541211 Scott's CPA practice is located at 678 Third Street, Riverside, CA 92860 Scotts income statement for the year shows the following Income Statement Scott Butterfield, CPA Income Statement 12 31 2017 Current Period Prior Period 1 1 2017 to 12 31 2017 1 1 2016 to 12 31 2016 REVENUES Tax Services $75,067 00 $72,154 00 Accounting Services 48,860 00 50,256 00 Other Consulting Services 10,115 00 7,690 00 TOTAL REVENUES 134,042 00 130,100 00 COST OF SERVICES Salaries 30,100 00 29,400 00 Payroll Taxes 2,387 00 2,275 00 Supplies 1,548 00 1,225 00 TOTAL COST OF SERVICES 34,035 00 32,900 00 GROSS PROFIT (LOSS) 100,007 00 97,200 00 OPERATING EXPENSES Advertising and Promotion 350 00 Business Licenses and Permits 250 00 250 00 Charitable Contributions 275 00 250 00 Continuing Education 300 00 Dues and Subscriptions 3,500 00 3,500 00 Insurance 875 00 870 00 Meals and Entertainment 5,500 00 5,400 00 Office Expense 150 00 Postage and Delivery 50 00 Printing and Reproduction 100 00 Office Rent 14,000 00 13,800 00 Travel 865 00 750 00 Utilities 2,978 00 2,724 00 TOTAL OPERATING EXPENSES 29,193 00 27,544 00 NET INCOME (LOSS) $70,814 00 $69,656 00 Scott also mentioned the following The expenses for dues and subscriptions were his country club membership dues for the year The charitable contributions were made to a political action committee Scott does not generate income from the sale of goods and therefore does not record supplies and wages as part of cost of goods sold Scott placed a business auto in service on January 1, 2014 and drove it 3,901 miles for business, 3,250 miles for commuting, and 4,500 miles for nonbusiness purposes His wife has a car for personal use Complete Schedule C for Scott showing Scott's net income from self employment Assume Scott has evidence to support his deductions If required, only use the minus sign to indicate a net loss When required, round amounts to the nearest dollar SCHEDULE C (Form 1040) Department of the Treasury Internal Revenue Service (99) Profit or Loss From Business (Sole Proprietorship) Go to www irs gov ScheduleC for instructions and the latest information Attach to Form 1040, 1040NR, or 1041 partnerships generally must file Form 1065 OMB No 1545 0074 2017 Attachment Sequence No 09 Name of proprietor Scott Butterfield Social security number (SSN) 644 47 7833 A Principal business or profession, including product or service (see instructions) Accounting Services B Enter code from instructions 541211 C Business name If no separate business name, leave blank D Employer ID number (EIN), (see instr ) E Business address (including suite or room no ) 678 Third Street City, town or post office, state, and ZIP code Riverside, CA 92860 F Accounting method (1) Cash (2) Accrual (3) Other (specify) G Did you materially participate in the operation of this business during 2017 If No, see instructions for limit on losses Yes No H If you started or acquired this business during 2017, check here I Did you make any payments in 2017 that would require you to file Form(s) 1099 (see instructions) Yes No J If Yes, did you or will you file required Forms 1099 Yes No Part I Income 1 Gross receipts or sales See instructions for line 1 and check the box if this income was reported to you on Form W 2 and the Statutory employee box on that form was checked 1 134042 2 Returns and allowances 2 3 Subtract line 2 from line 1 3 134042 4 Cost of goods sold (from line 42) 4 5 Gross profit Subtract line 4 from line 3 5 134042 6 Other income, including federal and state gasoline or fuel tax credit or refund (see instructions) 6 7 Gross income Add lines 5 and 6 7 134042 Part II Expenses Enter expenses for business use of your home only on line 30 8 Advertising 8 350 18 Office expense (see instructions) 18 200 9 Car and truck expenses (see 19 Pension and profit sharing plans 19 instructions) 9 2087 20 Rent or lease (see instructions) 10 Commissions and fees 10 a Vehicles, machinery, and equipment 20a 11 Contract labor (see instructions) 11 b Other business property 20b 1400 12 Depletion 12 21 Repairs and maintenance 21 13 Depreciation and section 179 22 Supplies (not included in Part III) 22 1548 expense deduction (not included in Part III) 23 Taxes and licenses 23 2637 (see instructions) 13 24 Travel, meals, and entertainment 14 Employee benefit programs a Travel 24a 865 (other than on line 19) 14 b Deductible meals and 15 Insurance (other than health) 15 875 entertainment (see instructions) 24b 2750 16 Interest 25 Utilities 25 2978 a Mortgage (paid to banks, etc ) 16a 26 Wages (less employment credits) 26 3900 b Other 16b 27a Other expenses (from line 48) 27a 400 17 Legal and professional services 17 b Reserved for future use 27b 28 Total expenses before expenses for business use of home Add lines 8 through 27a 28 58790 29 Tentative profit or (loss) Subtract line 28 from line 7 29 75252 30 Expenses for business use of your home Do not report these expenses elsewhere Attach Form 8829 unless using the simplified method (see instructions) Simplified method filers only enter the total square footage of (a) your home and (b) the part of your home used for business Use the Simplified Method Worksheet in the instructions to figure the amount to enter on line 30 30 31 Net profit or (loss) Subtract line 30 from line 29 If a profit, enter on both Form 1040, line 12 (or Form 1040NR, line 13 ) and on Schedule SE, line 2 (If you checked the box on line 1, see instructions) Estates and trusts, enter on Form 1041, line 3 If a loss, you must go to line 32 31 75252 32 If you have a loss, check the box that describes your investment in this activity (see instructions) If you checked 32a, enter the loss on both Form 1040, line 12, (or Form 1040NR, line 13 ) and on Schedule SE, line 2 (If you checked the box on line 1, see the line 31 instructions) Estates and trusts, enter on Form 1041, line 3 If you checked 32b, you must attach Form 6198 Your loss may be limited 32a All investment is at risk 32b Some investment is not at risk For Paperwork Reduction Act Notice, see the separate instructions Cat No 11334P Schedule C (Form 1040) 2017 Schedule C (Form 1040) 2017 Part III Cost of Goods Sold (see instructions) 33 Method(s) used to value closing inventory a Cost b Lower of cost or market c Other (attach explanation) 34 Was there any change in determining quantities, costs, or valuations between opening and closing inventory If Yes, attach explanation Yes No 35 Inventory at beginning of year If different from last year's closing inventory, attach explanation 35 36 Purchases less cost of items withdrawn for personal use 36 37 Cost of labor Do not include any amounts paid to yourself 37 38 Materials and supplies 38 39 Other costs 39 40 Add lines 35 through 39 40 41 Inventory at end of year 41 42 Cost of goods sold Subtract line 41 from line 40 Enter the result here and on line 4 42 Part IV Information on Your Vehicle Complete this part only if you are claiming car or truck expenses on line 9 and are not required to file Form 4562 for this business See the instructions for line 13 to find out if you must file Form 4562 43 When did you place your vehicle in service for business purposes (month, day, year) 1 1 14 44 Of the total number of miles you drove your vehicle during 2017, enter the number of miles you used your vehicle for a Business 3901 b Commuting (see instructions) 3250 c Other 4500 45 Was your vehicle available for personal use during off duty hours Yes 46 Do you (or your spouse) have another vehicle available for personal use Yes 47a Do you have evidence to support your deduction Yes b If Yes, is the evidence written Yes Part V Other Expenses List below business expenses not included on lines 826 or line 30 Continuing Education 300 Printing 100 48 Total other expenses Enter here and on line 27a 48 400 Schedule C (Form 1040) 2017 I NEED HELP WITH THE FOLLOWING Complete the reconciliation of book expenses to tax expenses Book expenses $ Total disallowed expenses for tax Additional expense deducted for tax Total Tax expenses $

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Question: I completed everything except for the last part. I know my answers are right because i double checked but i just dont know how to

I completed everything except for the last part. I know my answers are right because i double checked but i just dont know how to answer the last section.

Problem 3-1 Schedule C (LO 3.1)

Scott Butterfield is self-employed as a CPA. He uses the cash method of accounting, and his Social Security number is 644-47-7833. His principal business code is 541211. Scott's CPA practice is located at 678 Third Street, Riverside, CA 92860. Scotts income statement for the year shows the following:

Income Statement
Scott Butterfield, CPA Income Statement 12/31/2017
	Current Period	Prior Period
	1/1/2017 to 12/31/2017	1/1/2016 to 12/31/2016
REVENUES
Tax Services	$75,067.00	$72,154.00
Accounting Services	48,860.00	50,256.00
Other Consulting Services	10,115.00	7,690.00
TOTAL REVENUES	134,042.00	130,100.00
COST OF SERVICES
Salaries	30,100.00	29,400.00
Payroll Taxes	2,387.00	2,275.00
Supplies	1,548.00	1,225.00
TOTAL COST OF SERVICES	34,035.00	32,900.00
GROSS PROFIT (LOSS)	100,007.00	97,200.00
OPERATING EXPENSES
Advertising and Promotion	350.00
Business Licenses and Permits	250.00	250.00
Charitable Contributions	275.00	250.00
Continuing Education	300.00
Dues and Subscriptions	3,500.00	3,500.00
Insurance	875.00	870.00
Meals and Entertainment	5,500.00	5,400.00
Office Expense	150.00
Postage and Delivery	50.00
Printing and Reproduction	100.00
Office Rent	14,000.00	13,800.00
Travel	865.00	750.00
Utilities	2,978.00	2,724.00
TOTAL OPERATING EXPENSES	29,193.00	27,544.00

NET INCOME (LOSS)	$70,814.00	$69,656.00

Scott also mentioned the following:

The expenses for dues and subscriptions were his country club membership dues for the year.

The charitable contributions were made to a political action committee.

Scott does not generate income from the sale of goods and therefore does not record supplies and wages as part of cost of goods sold.

Scott placed a business auto in service on January 1, 2014 and drove it 3,901 miles for business, 3,250 miles for commuting, and 4,500 miles for nonbusiness purposes. His wife has a car for personal use.

Complete Schedule C for Scott showing Scott's net income from self-employment. Assume Scott has evidence to support his deductions. If required, only use the minus sign to indicate a net loss. When required, round amounts to the nearest dollar.

SCHEDULE C (Form 1040) Department of the Treasury Internal Revenue Service (99)

Profit or Loss From Business ^{(Sole Proprietorship)} ? Go to www.irs.gov/ScheduleC for instructions and the latest information. ? Attach to Form 1040, 1040NR, or 1041; partnerships generally must file Form 1065.

OMB No. 1545-0074

2017

Attachment Sequence No. 09

Name of proprietor Scott Butterfield

Social security number (SSN) 644-47-7833

Principal business or profession, including product or service (see instructions) Accounting Services

Enter code from instructions ? 541211

Business name. If no separate business name, leave blank.

Employer ID number (EIN), (see instr.)

Business address (including suite or room no.) ? 678 Third Street

City, town or post office, state, and ZIP code Riverside, CA 92860

Accounting method: (1) ? Cash (2) ? Accrual (3) ? Other (specify) ?

G	Did you "materially participate" in the operation of this business during 2017? If "No," see instructions for limit on losses	? Yes ?No
H	If you started or acquired this business during 2017, check here . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	?
I	Did you make any payments in 2017 that would require you to file Form(s) 1099? (see instructions) . . . . . . .	? Yes ? No
J	If "Yes," did you or will you file required Forms 1099? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	?Yes ? No

Part I

Income

1	Gross receipts or sales. See instructions for line 1 and check the box if this income was reported to you on Form W-2 and the "Statutory employee" box on that form was checked . . . . . . . . . . . . . . . . . . . . ? ?	1	134042
2	Returns and allowances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	2
3	Subtract line 2 from line 1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	3	134042
4	Cost of goods sold (from line 42) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	4
5	Gross profit. Subtract line 4 from line 3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	5 134042
6	Other income, including federal and state gasoline or fuel tax credit or refund (see instructions) . . . .	6
7	Gross income. Add lines 5 and 6 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ?	7	134042

Part II

Expenses. Enter expenses for business use of your home only on line 30.

8	Advertising . . . . . . . . . . . .	8	350	18	Office expense (see instructions) . . . .	18	200
9	Car and truck expenses (see			19	Pension and profit-sharing plans . . . .	19
	instructions). . . . . . . . . . .	9	2087	20	Rent or lease (see instructions): . . . . .
10	Commissions and fees . . . .	10		a	Vehicles, machinery, and equipment . . .	20a
11	Contract labor (see instructions)	11		b	Other business property . . . . . . . . .	20b	1400
12	Depletion . . . . . . . . . . . .	12		21	Repairs and maintenance . . . . . . . . .	21
13	Depreciation and section 179			22	Supplies (not included in Part III) . . .	22	1548
	expense deduction (not included in Part III)			23	Taxes and licenses . . . . . . . . . . . .	23	2637
	(see instructions)	13		24	Travel, meals, and entertainment:
14	Employee benefit programs			a	Travel. . . . . . . . . . . . . . . . . . . . .	24a	865
	(other than on line 19) . . . .	14		b	Deductible meals and
15	Insurance (other than health)	15	875		entertainment (see instructions) . . . .	24b	2750
16	Interest:			25	Utilities . . . . . . . . . . . . . . . . . . . . .	25	2978
a	Mortgage (paid to banks, etc.)	16a		26	Wages (less employment credits) . . . .	26	3900
b	Other . . . . . . . . . . . . . .	16b		27a	Other expenses (from line 48) . . . . . .	27a	400
17	Legal and professional services	17		b	Reserved for future use . . . . . . . .	27b

28	Total expenses before expenses for business use of home. Add lines 8 through 27a . . . . . . . . . . . . . . ?		28	58790
29	Tentative profit or (loss). Subtract line 28 from line 7. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .		29	75252
30	Expenses for business use of your home. Do not report these expenses elsewhere. Attach Form 8829 unless using the simplified method (see instructions). Simplified method filers only: enter the total square footage of: (a) your home: _____________ and (b) the part of your home used for business: _____________Use the Simplified Method Worksheet in the instructions to figure the amount to enter on line 30 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .		30
31	Net profit or (loss). Subtract line 30 from line 29. If a profit, enter on both Form 1040, line 12 (or Form 1040NR, line 13) and on Schedule SE, line 2. (If you checked the box on line 1, see instructions). Estates and trusts, enter on Form 1041, line 3. If a loss, you must go to line 32.	}	31	75252
31		}

32	If you have a loss, check the box that describes your investment in this activity (see instructions). If you checked 32a, enter the loss on both Form 1040, line 12, (or Form 1040NR, line 13) and on Schedule SE, line 2. (If you checked the box on line 1, see the line 31 instructions). Estates and trusts, enter on Form 1041, line 3. If you checked 32b, you must attach Form 6198. Your loss may be limited.	}	32a ? All investment is at risk.
			32b ? Some investment is not at risk.

For Paperwork Reduction Act Notice, see the separate instructions.	Cat. No. 11334P	Schedule C (Form 1040) 2017
		Schedule C (Form 1040) 2017

Schedule C (Form 1040) 2017

Part III

Cost of Goods Sold (see instructions)

33	Method(s) used to
	value closing inventory: a ? Cost b ? Lower of cost or market c ? Other (attach explanation)
34	Was there any change in determining quantities, costs, or valuations between opening and closing inventory?
	If "Yes," attach explanation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ? Yes ? No

35	Inventory at beginning of year. If different from last year's closing inventory, attach explanation . . .	35
36	Purchases less cost of items withdrawn for personal use . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	36
37	Cost of labor. Do not include any amounts paid to yourself . . . . . . . . . . . . . . . . . . . . . . . . . . . .	37
38	Materials and supplies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	38
39	Other costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	39
40	Add lines 35 through 39 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	40
41	Inventory at end of year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	41
42	Cost of goods sold. Subtract line 41 from line 40. Enter the result here and on line 4. . . . . . . .	42

Part IV

Information on Your Vehicle. Complete this part only if you are claiming car or truck expenses on line 9 and are not required to file Form 4562 for this business. See the instructions for line 13 to find out if you must file Form 4562.

When did you place your vehicle in service for business purposes? (month, day, year) ? 1/1/14

Of the total number of miles you drove your vehicle during 2017, enter the number of miles you used your vehicle for:

a Business 3901 b Commuting (see instructions) 3250 c Other 4500

Was your vehicle available for personal use during off-duty hours? . . . . . . . . . . . . . . . . . . .

Yes

Do you (or your spouse) have another vehicle available for personal use? . . . . . . . . . . . . .

Yes

47a

Do you have evidence to support your deduction? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Yes

If "Yes," is the evidence written? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Yes

Part V

Other Expenses. List below business expenses not included on lines 826 or line 30.

Continuing Education		300
Printing		100

Total other expenses. Enter here and on line 27a . . . . . . . . . . . . . . . . . . . . . . . . . . . .

400

Schedule C (Form 1040) 2017

I NEED HELP WITH THE FOLLOWING

Complete the reconciliation of book expenses to tax expenses.

Book expenses	$
Total disallowed expenses for tax
Additional expense deducted for tax
Total Tax expenses	$

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