Mike Webb, married to Nancy Webb, is employed by a large pharmaceutical company and earns a salary. In addition, Mike is an entrepreneur and has two small businesses on the side, both of which operate as sole proprietorships, both on a cash basis. One is a profitable consulting business where Mike provides financial and retirement advice to pharmacists. The other involves the manufacture of Christmas novelties in China, selling the products in gift shops in the U.S. This business is struggling. However, Mike feels the Christmas novelty business has great potential. Mike reports the following for 2015: $150,000 Salary $65,000 Consulting practice: Revenues Supplies 1,250 Subscriptions to Industry Pubs 250 Telephone 940 Mileage (0.575 x 6,0000 3,450* Conferences (Travel & Fees) 2,500 Meals Conferences 300 Lunches with Clients 2,000 Software Licenses 1,500 Computer & Printer equipment purchased 3 years ago (100% business use) for $5,000 on June 1st of that year. $22,000 Sole proprietorship: Revenues 5,000 Opening Inventory** 15,000 Purchases 5,000 Freight In 13,000 Ending Inventory Warehouse & ffice Rent 11,400 Utilities 3,000 5,500 Advertising Mileage (.575X 14,100) 8,108 Mike Webb, married to Nancy Webb, is employed by a large pharmaceutical company and earns a salary. In addition, Mike is an entrepreneur and has two small businesses on the side, both of which operate as sole proprietorships, both on a cash basis. One is a profitable consulting business where Mike provides financial and retirement advice to pharmacists. The other involves the manufacture of Christmas novelties in China, selling the products in gift shops in the U.S. This business is struggling. However, Mike feels the Christmas novelty business has great potential. Mike reports the following for 2015: $150,000 Salary $65,000 Consulting practice: Revenues Supplies 1,250 Subscriptions to Industry Pubs 250 Telephone 940 Mileage (0.575 x 6,0000 3,450* Conferences (Travel & Fees) 2,500 Meals Conferences 300 Lunches with Clients 2,000 Software Licenses 1,500 Computer & Printer equipment purchased 3 years ago (100% business use) for $5,000 on June 1st of that year. $22,000 Sole proprietorship: Revenues 5,000 Opening Inventory** 15,000 Purchases 5,000 Freight In 13,000 Ending Inventory Warehouse & ffice Rent 11,400 Utilities 3,000 5,500 Advertising Mileage (.575X 14,100) 8,108