Rhea Xu is a self-employed professional singer. She resides in a rented apartment and uses one room exclusively as a business office.This room includes 405 of the 2,700 square feet of living space in the apartment. Ms. Xu performs in recording studios and concerthalls, but she conducts all of the administrative duties with respect to the business in her home office. This year, Ms. Xu's apartmentrent was $60,000. She paid $6,400 to a housekeeping service that cleaned the entire apartment once a week and $3,200 for renter'sinsurance on the apartment furnishings.Required:a. Compute Ms. Xu's home office deduction assuming that her net profit before the deduction was $420,000.b. Compute Ms. Xu's home office deduction assuming that her net profit before the deduction was $5,200.Complete this question by entering your answers in the tabs below.Required A Required BCompute Ms. Xu's home office deduction assuming that her net profit before the deduction was $420,000.Home office deduction0Required B >

a).Calculation of Ms. Xu's home office deduction, assuming that her net profit before the deduction…

Answered: Rhea Xu is a self-employed professional…

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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To support herself while attending school, Daun Deloch sold stereo systems to other students. During the first year of operations, Deloch purchased the stereo systems for $159,000 and sold them for $298,000 cash. She provided her customers with a one-year warranty against defects in parts and labor. Based on industry standards, she estimated that warranty claims would amount to 4 percent of sales. During the year, she paid $1,790 cash to replace a defective tuner. Required a-1. Prepare an income statement for Deloch's first year of operation. a-2. Prepare a statement of cash flows for Deloch's first year of operation. Complete this question by entering your answers in the tabs below. Required A1 Required A2 Prepare an income statement for Deloch's first year of operation. DELOCH STEREOS Income Statement $ 0 0 Required A2 >
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