Question

Questions and Problems Group 5: Cumulative Software Problem 1. The following additional information is available for the Albert and Allison Gaytor family from Chapters 1 and 2. On September 1, Allison opened a retail store that specializes in sports car accessories. The name of the store is "Toge Pass." The store is located at 617 Crandon Boulevard, Key Biscayne, FL 33149. The store uses the cash method of accounting for everything except inventory which is kept on an accrual basis. The store's EIN is 98-7321654. Allison purchased inventory in August and thus started her business on September 1 with $40,100 of inventory. The Toge Pass accountant provided the following financial information:

Need to fill out 1040 form and 1040 with schedule C

Answer 1

INCOME

1 Gross receipts or sales.	63400
2 Returns and allowance	600
3 Subtract line 2 from line 1	62800
4 Cost of goods sold	39800
5 Gross profit. Subtract line 4 from line 3	23000
6 Other income, including federal and state gasoline or fuel tax credit or refund	-
7 Gross income. Add lines 5 and 6	23000

EXPENSES

Advertising	3100
Employee Wages	3350
Insurance other than health	800
Mortgage (paid to banks)	2760
Office expenses	1380
Rent or lease	7550
utilities	992
Other expenses	1602
Total expensse	21534

COST OF GOODS SOLD

1)Inventory at beginning of year	40100
2)Purchases less cost of items withdrawn for personal use	37800
3) ADD 1 and 2 above	77900
4)Inventory at end of year	38100
5)Cost of goods sold	39800

OTHER EXPENSES

Accounting fee	310
Telephone	800
maintenance	427
misc	65
Total	1602