Question

Brittany and curl basis taxpayer operates a small distribution business her records show The following income items for the year sales paid of $64,000 sales on paid 2750 Des distribution of the year's prize from her suppliers is $1,975 what amount does Britney report as her gross income on her schedule c a 64000 b 65975 66c 66750 d 68725 what is the answer

Answer 1

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Schedule C is required to be filed by Sole Proprietorship for Profit or Loss from Business.

Hence the essential question here is which of the above income for part of Business Income.

As is pretty evident, $64,000 will form part of income.

$2750 will also form part of income. Since most business follow accrual system of accounting, it is irrelevant whether sales have been paid or not. Hence $2750 will also form part of income.

Business income will also include the prize received from supplier i.e,. $ 1975

Hence the correct answer would be Option ( d ) $ 68,725 ( $64,000 + $ 2,750 + $ 1,975 )