The TPs sole proprietorship had the following revenues and expenses during 2021: Sales Revenue $485,000
Question:
The TP’s sole proprietorship had the following revenues and expenses during 2021:
Sales Revenue $485,000
Sales Returns $ 17,000
Cost of Goods Sold $161,000
Interest Expense on business loan $ 4,000
Car/Truck Expense (repairs, gas, oil, etc.) $ 8,300
Taxes and licenses $ 18,300
Depreciation $ 9,500
Utilities $ 3,500
Wages to sales staff $110,000
Fee paid to CPA for Schedule C $ 1,500
1.The net profit for the sole proprietorship would be $____________________, and it would be reported on _____________________.
a. $154,600, Schedule C, Line 31.
b. $154,600, Schedule C, Line 7.
c. $152,400, Schedule C, Line 31.
d. $151,900, Schedule C, Line 31.
2. Based on the information contained in Question 1 above, the only correct entry for the TP to report based on the following choices would be:
a. $17,578 on Schedule 1, Line 12.
b. $10,731 on Schedule 1, Line 15.
c. $21,662 on Schedule SE, Line 13.
d. $10,731 on Schedule 2, Line 4.
South-Western Federal Taxation 2018 Comprehensive
ISBN: 9781337386005
41st Edition
Authors: David M. Maloney, William H. Hoffman, Jr., William A. Raabe, James C. Young