Michael reported the following information for 2020. Michael is a cash basis, self-employed professional hunting guide. During
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Michael reported the following information for 2020.
Michael is a cash basis, self-employed professional hunting guide.
During 2020, he provided and billed clients for $103,000 in hunting related services. At the end of the year, he had collected $74,000 of that amount. Michael estimates that $5,000 of the remaining $29,000 to be collected will be uncollectible.
Michael reported the following cash expenditures related to his business:
- Liability insurance policy (covering 6/1/20-5/31/21) $21,000
- Two-year contract for advertising in Field & Stream magazine (covering 8/1/20-7/31/22) $2,280
- Michael is required to obtain 4 hours of safety training every year to maintain his license. This year the 4 hours cost him $750.
- During 2020, Michael used his personal truck for business purposes. He kept track of his fuel costs for business trips which totaled $400. He drove a total of 900 business miles.
- Michael was fined $200 for taking clients hunting in a restricted area. It was an area that was newly restricted and Michael didn’t realize it was restricted.
- Michael liked to take his most loyal clients to St. Louis Blues games where they could discuss their next guided adventures. During the year, he spent $2,000 on tickets to the games with clients. Business was always discussed.
Calculate Michael’s AGI. Label your final answer and label your numbers to make it easier to grade.
Related Book For
Principles of Accounting
ISBN: 9780077300456
1st edition
Authors: Robert Libby, Patricia Libby, Fred Phillips, Stacey Whitecotton
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