Ms. Jill Jackson wanted to start a home-based business that would specialize in selling T-shirts. The...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
Ms. Jill Jackson wanted to start a home-based business that would specialize in selling T-shirts. The business would be operated from her principal residence. She set aside 20% of the total floor space in the residence for the T-shirt operations. Ms. Jill Jackson's principal residence, costing $860,000 in total, was acquired on January 1, 2020. It is estimated that $260,000 of this total value can be attributed to the land value. Ms. Jill Jackson incurred the following 2020 costs relating to the principal residence: Utilities for the Home (Heat, Light & Water) Mortgage Interest House Insurance Property Taxes Repairs & Maintenance for the Home Total House Costs $3,400 14,000 0 Ⓡ 345,000 Image transcription text Utilities for the Home (Heat, Light 8: Water) $3,400 Mortgage Interest 14,000 House Insurance 4,500 Property Taxes 12,000 Repairs 8:. Maintenance for the Home 9,100 Total House Costs The business commenced operations on February 01, 2020. On that date, Ms. Jill Jackson purchased the following assets to be used in her new business: Office Furniture & Shelving Computer Business Software Total Purchases $80,000 6,000 5,000 $91,000 Ⓒ In addition, Ms. Jill Jackson had a separate telephone line installed for dealing with the mail order business. During the period February 1, 2020, through December 31, 2020, Ms. Jill Jackson's mail order sales totaled $920,000. Costs associated with these sales included the following: Cost of Merchandise Purchased Unsold Merchandise on December 31, 2020 Packaging Material Mailing Costs Office Supplies Telephone Charges Printing of Brochures Membership in Tennis Club Meals & Entertainment Cos Total Costs $780,000 50,000 20,000 55,000 25,000 6,0MM) } } $1,05/000 Image transcription text Cast of Merchandise Purchased $780,000 Unsuld Merchandise on December 31, 2020 50,000 Packaging Material 20,000 Mailing Costs 55,000 Office Supplies 25,000 Telephone Charg... Show more Required: 1. Can Ms. Jill Jackson deduct work space in the home costs? Briefly explain your decision. 2. Calculate Ms. Jill Jackson's 2020 minimum net business income or loss that she will report on her 2020 income tax return. 3. Briefly discuss any issues that should be discussed with Ms. Jill Jackson regarding the work space in her home and business costs. Required: 1. Can Ms. Jill Jackson deduct work space in the home costs? Briefly explain your decision. 2. Calculate Ms. Jill Jackson's 2020 minimum net business income or loss that she will report on her 2020 income tax return. 3. Briefly discuss any issues that should be discussed with Ms. Jill Jackson regarding the work space in her home and business costs. Ms. Jill Jackson wanted to start a home-based business that would specialize in selling T-shirts. The business would be operated from her principal residence. She set aside 20% of the total floor space in the residence for the T-shirt operations. Ms. Jill Jackson's principal residence, costing $860,000 in total, was acquired on January 1, 2020. It is estimated that $260,000 of this total value can be attributed to the land value. Ms. Jill Jackson incurred the following 2020 costs relating to the principal residence: Utilities for the Home (Heat, Light & Water) Mortgage Interest House Insurance Property Taxes Repairs & Maintenance for the Home Total House Costs $3,400 14,000 0 Ⓡ 345,000 Image transcription text Utilities for the Home (Heat, Light 8: Water) $3,400 Mortgage Interest 14,000 House Insurance 4,500 Property Taxes 12,000 Repairs 8:. Maintenance for the Home 9,100 Total House Costs The business commenced operations on February 01, 2020. On that date, Ms. Jill Jackson purchased the following assets to be used in her new business: Office Furniture & Shelving Computer Business Software Total Purchases $80,000 6,000 5,000 $91,000 Ⓒ In addition, Ms. Jill Jackson had a separate telephone line installed for dealing with the mail order business. During the period February 1, 2020, through December 31, 2020, Ms. Jill Jackson's mail order sales totaled $920,000. Costs associated with these sales included the following: Cost of Merchandise Purchased Unsold Merchandise on December 31, 2020 Packaging Material Mailing Costs Office Supplies Telephone Charges Printing of Brochures Membership in Tennis Club Meals & Entertainment Cos Total Costs $780,000 50,000 20,000 55,000 25,000 6,0MM) } } $1,05/000 Image transcription text Cast of Merchandise Purchased $780,000 Unsuld Merchandise on December 31, 2020 50,000 Packaging Material 20,000 Mailing Costs 55,000 Office Supplies 25,000 Telephone Charg... Show more Required: 1. Can Ms. Jill Jackson deduct work space in the home costs? Briefly explain your decision. 2. Calculate Ms. Jill Jackson's 2020 minimum net business income or loss that she will report on her 2020 income tax return. 3. Briefly discuss any issues that should be discussed with Ms. Jill Jackson regarding the work space in her home and business costs. Required: 1. Can Ms. Jill Jackson deduct work space in the home costs? Briefly explain your decision. 2. Calculate Ms. Jill Jackson's 2020 minimum net business income or loss that she will report on her 2020 income tax return. 3. Briefly discuss any issues that should be discussed with Ms. Jill Jackson regarding the work space in her home and business costs.
Expert Answer:
Related Book For
Modern Management Concepts And Skills
ISBN: 9781292265193
15th global Edition
Authors: Samuel Certo, S Certo
Posted Date:
Students also viewed these business writing questions
-
A plot of land costing $200,000 was acquired on January 1, 2001. The price level was 120 on that date. One-quarter of the land was sold on December 31, 2001, for $60,000 when the general price level...
-
A piece of heavy equipment acquired on January 1 at a cost of $360,000 has an estimated useful life of 20 years. Assuming that it will have no residual value, determine the depreciation for each of...
-
Duane wanted to start a limo service and already had a name picked out, Amore Limos. While many limos offered bar service, he decided to also provide appropriate snacks pate, caviar and other...
-
Assume that the duration of human pregnancies can be described by a Normal model with mean 266 days and standard deviation 16 days. a) What percentage of pregnancies should last between 270 and 280...
-
Shop for a product of your choice on Amazon.com. Do consumer reviews influence your perception of a product or brand offered? Consumers participating in the Amazon Vine Program submit many of the...
-
Reactions in which a substance decomposes by losing CO are called decarbonylation reactions. The decarbonylation of acetic acid proceeds as follows: CH3COOH(I) CH3OH(g) + CO(g) By using data from...
-
Define these terms: a. Materiality b. Control risk c. Inherent risk d. Detection risk
-
Consider the balance sheets and selected data from the income statement of Keith Corporation that appear below and on shown below. Keith Corporation Income Statement Data (2012) Depreciation expense...
-
. If the spot rate was $0.8205/C$ and the 90-day forward rate was $0.8323/C$, how much more (in U.S. dollars) would you receive by selling C$1,130,000 at the forward rate than at the spot rate?...
-
The following is the post-closing trial balance for Kennesaw Company, Inc (KCI), a merchandising company, at December 31, 2024. Account Title Cash Accounts Receivable Allowance for Uncollectible...
-
Resting VO2 has no influence on the magnitude of the EPOC. Group of answer choices True False The EPOC is roughly 50% of the total energy expenditure during exercise. Group of answer choices True...
-
What is a particular arbitration, dispute resolution skill that you are focused on developing or improving right now, and why?
-
Given the following matrices E and F, compute the product EF, if possible. 3 B= -3 -6 3-5-3
-
BMW target audience comprises individuals who value luxury, performance, and innovative design in their vehicles. In fact, BMW's vision is to "be the most successful, most sustainable premium...
-
USE THE FOLLOWING INFORMATION TO ANSWER THE NEXT (3) QUESTIONS: Harvey, Inc. performed services on October 1, 2014 and received a $268,958, 10% note requiring 5 equal annual payments of P&I, with the...
-
In the market for apples, the demand curve is Q = 503P and the supply curve is Q =2P. The Government decides to raise revenue by taxing consumers 2 for every apple purchased. i) Graph the supply and...
-
(Bond valuation) Pybus, Inc. is considering issuing bonds that will mature in 17 years with an annual coupon rate of 9 percent. Their par value will be $1,000, and the interest will be paid...
-
Some people argue that the internal control requirements of the Sarbanes-Oxley Act (SOX) put U.S. companies at a competitive disadvantage to companies outside the United States. Discuss the...
-
The Challenge Case Bain & Companys CEO, Bob Bechek, Leads the Team (p. 359) and its related Challenge Case Summary were written to help you understand the management concepts contained in this...
-
List and discuss four ways that you might settle conflict that results from an organizational change that you make.
-
What are the four stages of the formal group development process identified by Bernard Bass? Explain each stage.
-
Question: When Phil McConkey interviewed for a job as an insurance agent with Alexander & Alexander, the company did not tell him that it was engaged in secret negotiations to merge with Aon. When...
-
Question: When Thomas Lussier filled out a Postal Service employment applica- tion, he did not admit that he had twice pleaded guilty to charges of disorderly conduct. Lussier suffered from Post...
-
Question: The Duke Power Co. refused to transfer any employees at its generating plant to better jobs unless they had a high school diploma or could pass an intelligence test. The company was willing...
Study smarter with the SolutionInn App