Question: If any thing is required please let me know Problem 1. Ordinary & Necessary Business Expenses. Sophia is the sole owner of a catering business,

If any thing is required please let me know

If any thing is required please let me know
Problem 1. Ordinary & Necessary Business Expenses. Sophia is the sole owner of a catering business, called Sophia's Fine Catering (hereinafter "SFC") that earned $1,500,000 in revenues in 2018. Please determine which of the following expenses are deductible as ordinary and necessary business expenses: (iii) (iv) SFC incurred $399,857 in expenses for food supplies that were all used during the tax year. SFC put the expenses on its credit card and then paid the full balance on the card each month. SFC paid $237,000 in total wages to its 4 full time employees and 5 part-time employees during the year as well as $18,131 in FICA taxes. SFC also withheld and paid $18,131 employee portion of FICA taxes (this withheld amount was included in the total wages amount). SFC also paid $47,000 in health insurance premiums for the health insurance plan that covers all the full- time employees and Sophia. SFC paid $3,000 for various client development lunches Sophia had with prospective clients, plus $500 for the restaurant bill for a holiday party for Sophia's family. SFC paid $57,000 for fine linens imported from Bangaladesh and $85,000 for fine crystal imported from the Czech Republic, all of which are used to provide the catering services. Additionally, SFC paid $47,000 for other supplies used in the delivery of the catering services. Although Sophia occasionally (about 4-5 times a year) hosts parties for friends using these supplies and products. SFC pays a fine of $2,000 every year to the local government for failure to file for a local business food handler's permit (the permit would cost $10,000 a year). SFC does require its individual employees that prepare or serve food to maintain state level food handlers permits and it reimburses these expenses at a total cost of $750. SFC paid its external accountants $32,000 for its annual audit and general consulting services to train the company's book-keeper. SFC also paid $5,500 in attorney's fees for reviewing its contracts. Problem 2. Introduction to Schedule 0. Continuing based on the facts above. SFC was organized as an LLC, but since Sophia is the sole owner it is a disregarded entity and she reports the activities from the business on her Schedule C to Form 1040. Using the revenues of the business and the conclusions you made as to the deductibility of the various expenses in Problem 1 above, prepare Sophia's "Schedule C - Profit and Loss 7 NAM E: foh. C Ch. 9 Pt. 2 Workout Problems Ordinary and Necessary Exp & Acct 442: Professor John S. TreuL from Business" using the forms on the following pages. Use Exhibits 9-5 and 9-6 in your book as a guide. For simplicity, assume that none of the wages or benefits are allocable to COGS

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