Lew started a business writing a popular syndicated Japanese gardening column in the current year and will report a profit for his first year. His results of operations are as follows: Gross income $38,000 Travel expense 4,000 Transportation, 831 miles (at 58 cents per mile) 482 Entertainment 800 Subscription to bonsai and Japanese gardening magazines 500 Gifts: 8 at $100 each; 2 at $20 each 840 10,000 Rent and utilities for apartment, in total (15 percent is used for a home office) What is the net income Lew should show on his Schedule C? Show the calculation of his taxable income.
Lew started a business writing a popular syndicated Japanese gardening column in the current year and will report a profit for his first year. His results of operations are as follows: Gross income $38,000 Travel expense 4,000 Transportation, 831 miles (at 58 cents per mile) 482 Entertainment 800 Subscription to bonsai and Japanese gardening magazines 500 Gifts: 8 at $100 each; 2 at $20 each 840 10,000 Rent and utilities for apartment, in total (15 percent is used for a home office) What is the net income Lew should show on his Schedule C? Show the calculation of his taxable income.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Transcribed Image Text:Lew started a business writing a popular syndicated Japanese gardening column in the current year and will report a profit for his first year. His results of operations are as follows:
- **Gross income:** $38,000
- **Travel expense:** $4,000
- **Transportation, 831 miles (at 58 cents per mile):** $482
- **Entertainment:** $800
- **Subscription to bonsai and Japanese gardening magazines:** $500
- **Gifts: 8 at $100 each; 2 at $20 each:** $840
- **Rent and utilities for apartment, in total: $10,000**
- (15 percent is used for a home office)
**Question:**
What is the net income Lew should show on his Schedule C? Show the calculation of his taxable income.
**Calculation Structure:**
- **Gross income:** $__________
- **Expenses:**
- Travel: $__________
- Transportation-mileage: $__________
- Entertainment: $__________
- Subscriptions: $__________
- Gifts: $__________
- Home office (rent & utilities): $__________
- **Total Expenses:** $__________
- **Taxable income:** $__________
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