Samuel Lighthouse runs a small accounting proprietorship. You have been provided with the following financial information pertaining to his business: Sales $150,000 Cost of goods sold 80,000 Advertising in a local paper 1,000 Advertising in a U.S. newspaper directed at 2,000 Canadians living in the U.S. Meals and entertainment 10,000 Property taxes on a vacant piece of land (which earns no income) adjacent to the business 2,500 Golf course fees for Samuel 1,500 Cost of one convention held on a cruise ship in the 2,000 Mediterranean Sea sponsored by a Canadian fishing association. Required: A) Calculate the net income for tax purposes for Samuel's proprietorship. B) Explain why any items have been omitted. C) Briefly discuss how your answer would change if Samuel had an equal business partner, named Sally Watson.

Samuel Lighthouse runs a small accounting proprietorship. You have been provided with the following financial information pertaining to his business: Sales $150,000 Cost of goods sold 80,000 Advertising in a local paper 1,000 Advertising in a U.S. newspaper directed at 2,000 Canadians living in the U.S. Meals and entertainment 10,000 Property taxes on a vacant piece of land (which earns no income) adjacent to the business 2,500 Golf course fees for Samuel 1,500 Cost of one convention held on a cruise ship in the 2,000 Mediterranean Sea sponsored by a Canadian fishing association. Required: A) Calculate the net income for tax purposes for Samuel's proprietorship. B) Explain why any items have been omitted. C) Briefly discuss how your answer would change if Samuel had an equal business partner, named Sally Watson.

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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