Question

Question 73 of 75. Blake operated as a sole proprietor, reported on Schedule C (Form 1040). He used 350 square feet of his 2,100-square- foot rented loft exclusively and regularly for business. Blake used the cash accounting method and had the following income and expenses for his financial planning business: • Gross receipts: $36,960 • Expenses: • Advertising: $80 • Business insurance: $685 • Business license: $100 • Comprehensive health insurance (entire year): $7,788 • Office supplies: $76 • Postage: $38 • Rent (entire year): $14,400 • Renter's insurance (entire year): $1,055 • Second phone line, exclusively for business: $103 • Tax preparation (allocated to business): $350 • Utilities (entire year): $2,281. Blake closed his business on April 1, 2018. He had no carryover losses and all assets were fully depreciated. If Blake elects to use the office-in-home (OIH) simplified method, what is the amount of his Schedule C net profit or loss? 37,674 D C. $ 36, 153 B.$ 34,818 AO $34,515

Answer 1

ANSWER

The net profit according to schedule c ( office -in - home ) SIMPLIFIED METHOD.

gross receipts -expenses  

eligible expenses

advertising $80

business insurance $685

business license $100

office supplies $76

postage $38

second phone line $103

tax preparation $350

TOTAL EXPENSES $1432

NET PROFIT =GROSS RECEIPTS- EXPENSES= $36,960-$1432

=$35,528

NOTE(utilities are not given any information means ,generally the utilities not used by the business.rent and renters insurance cannot be taken (O I N) method .health insurance regards the owner but the business)