Tom, a cash basis sole proprietor, provides the following information: Gross receipts $30,000 Dividend income (on personal investments) 200 Cost of sales 15,400 Other operating expenses 3,000 State business taxes paid 300 What amount should Tom report as net profits from his business? a.$11,400 b.$10,900 c.$11,300 d.$14,400 e.None of these choices are correct.

Tom, a cash basis sole proprietor, provides the following information: Gross receipts $30,000 Dividend income (on personal investments) 200 Cost of sales 15,400 Other operating expenses 3,000 State business taxes paid 300 What amount should Tom report as net profits from his business? a.$11,400 b.$10,900 c.$11,300 d.$14,400 e.None of these choices are correct.

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

20th Edition

ISBN:9780357110362

Author:Murphy

Publisher:Murphy

Chapter1: Federal Income Taxation—an Overview

Section: Chapter Questions

Problem 52P

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P is a sole proprietor whose accounting records are incomplete. All the sales are cash sales and during the year $50,000 was banked, including $5,000 from the sale of a business car. He paid $12,000 wages in cash from the till and withdrew $2,000 per month as drawings. The cash in the till at the beginning and end of the year was $300 and $400 respectively. What was the value of P’s sales revenue for the year? A $80,900 B $81,000 C $81,100 D $86,100
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P is a sole proprietor whose accounting records are incomplete. All the sales are cash sales and during the year $50,000 was banked, including $5,000 from the sale of a business car. He paid $12,000 wages in cash from the till and withdrew $2,000 per month as drawings. The cash in the till at the beginning and end of the year was $300 and $400 respectively. What were the sales for the year? A $80,900 B $81,000 C $81,100 D $86,100
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