George used to work as a research analyst earning $80,000 per year. George has decided that he has had enough of the rat race and has decided to start his own business, and so he bought a local kebab shop for $45,000. To pay for the business, he took out his term deposit of $90,000 which until then was earning him 5.6% interest p.a. With the remainder of the money, he used it to pay a part time assistant of $25,000, and he runs the business by himself the rest of the time. He used the remainder of the money to pay for stock. In his first year of the business, George took in $50,000 sales. (a) As an accountant, work out Georges profit during the first year of trading. (b) As an economist, work out George's profit during the first year of trading.

George used to work as a research analyst earning $80,000 per year. George has decided that he has had enough of the rat race and has decided to start his own business, and so he bought a local kebab shop for $45,000. To pay for the business, he took out his term deposit of $90,000 which until then was earning him 5.6% interest p.a. With the remainder of the money, he used it to pay a part time assistant of $25,000, and he runs the business by himself the rest of the time. He used the remainder of the money to pay for stock. In his first year of the business, George took in $50,000 sales. (a) As an accountant, work out Georges profit during the first year of trading. (b) As an economist, work out George's profit during the first year of trading.

CONCEPTS IN FED.TAX.,2020-W/ACCESS

20th Edition

ISBN:9780357110362

Author:Murphy

Publisher:Murphy

Chapter13: Choice Of Business Entity—general Tax And Nontax Factors/formation

Section: Chapter Questions

Problem 76TPC

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