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FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Roger, an individual, owns a proprietorship called Green Thing. In the current year, Roger has the following items:

Business income $200,000
Business expense $150,000

Loss on a completely destroyed business machine. The machine had an adjusted basis of $25,000 and a fair market value of $20,000 before destroyed. The machine was not insured.

Loss on a business truck. The truck had an adjusted basis of $8,000. The repairs to fix the truck cost $10,000. He did not claim the loss from insurance company.

Determine Roger's net business income.

 
  • A.

    $47,000

  • B.

    $30,000

  • C.

    $22,000

  • D.

    $17,000

  • E.  $15,000

 

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