Scribd Logo
Upload

Welcome to Scribd!

  • Knowledge Check Five: Partial Problem

    Uploaded by

    Jay Sizzle
    3 views1 page
    Valencia is a self-employed florist who uses the cash method of accounting. She delivered flowers to a customer two years ago for $150 but was never paid. She paid $80 for the flowers. Since she never received payment, she did not include the $150 in her income. She is unable to collect the money. The amount Valencia can deduct as a bad debt is $80. Mallory Jones is a freelance book editor who incurred various business expenses such as advertising, supplies, licenses, insurance, and vehicle expenses. She purchased a used car for $12,599 including $600 in sales tax and drove it 1,279 total miles, with 972 miles for business. She wants to

    Original Description:

    Original Title

    Untitled

    Copyright

    © © All Rights Reserved

    Available Formats

    PDF, TXT or read online from Scribd

    Did you find this document useful?

    Is this content inappropriate?

    Report this Document
    Valencia is a self-employed florist who uses the cash method of accounting. She delivered flowers to a customer two years ago for $150 but was never paid. She paid $80 for the flowers. Since she never received payment, she did not include the $150 in her income. She is unable to collect the money. The amount Valencia can deduct as a bad debt is $80. Mallory Jones is a freelance book editor who incurred various business expenses such as advertising, supplies, licenses, insurance, and vehicle expenses. She purchased a used car for $12,599 including $600 in sales tax and drove it 1,279 total miles, with 972 miles for business. She wants to

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Flag for inappropriate content
    3 views1 page

    Knowledge Check Five: Partial Problem

    Uploaded by

    Jay Sizzle
    Valencia is a self-employed florist who uses the cash method of accounting. She delivered flowers to a customer two years ago for $150 but was never paid. She paid $80 for the flowers. Since she never received payment, she did not include the $150 in her income. She is unable to collect the money. The amount Valencia can deduct as a bad debt is $80. Mallory Jones is a freelance book editor who incurred various business expenses such as advertising, supplies, licenses, insurance, and vehicle expenses. She purchased a used car for $12,599 including $600 in sales tax and drove it 1,279 total miles, with 972 miles for business. She wants to

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Flag for inappropriate content
    of 1

    Knowledge Check Five

    &RPSOHWHWKH.QRZOHGJH&KHFNWRUHYLHZWKHOHVVRQLQIRUPDWLRQWKHQUHIHUWRWKH³.QRZOHGJH&KHFN
    $QVZHUV´VHFWLRQLQWKH)735HVRXUFH*XLGH

    1. 9DOHQFLDLVDVHOIHPSOR\HGÀRULVWZKRXVHVWKHFDVKPHWKRGRIDFFRXQWLQJ6KH
    GHOLYHUHGÀRZHUVWRDFXVWRPHUWZR\HDUVDJREXWWKH\QHYHUSDLGKHU9DOHQFLDSDLG
    IRUWKHÀRZHUVDQGWKHUHWDLOSULFHZDV9DOHQFLDGLGnot include the $150 in
    her income, because she never received payment. She is unable to collect the money.

    How much can Valencia deduct as a bad debt?


    ‰ $0 ‰ $150
    ‰ $80 ‰ $230

    Partial Problem
    Fill out a Schedule C, Parts II and IV, for Mallory Jones, and answer the questions that follow.

    Mallory Jones (400-00-1326) is a single, freelance book editor who works from home. She
    had the following business expenses during the year:
    Advertising ............................................................................. $525
    2ႈFHVXSSOLHVDQGSRVWDJH .................................................. $444
    Business license .................................................................... $200
    Business insurance ............................................................... $420
    Tax preparation (business portion only)................................. $150
    7HOHSKRQH ¿UVWOLQHLQWRKRXVHEXVLQHVVXVH ............ $142
    Telephone (second line into house - 100% business use) .... 

    Mallory purchased a used car that she uses mostly for business. She used her car to visit
    YDULRXVSXEOLVKHUVIRUZKRPVKHZRUNHG6KHSDLGLQFOXGLQJLQVDOHVWD[IRU
    WKHFDUDQGSODFHGLWLQVHUYLFHRQ-DQXDU\RIWKHWD[\HDU6KHGURYHLWWRWDOPLOHV
    ZKLFKLQFOXGHVEXVLQHVVPLOHVDQGQRFRPPXWLQJPLOHV6KHZDQWVWRXVHWKHVWDQGDUG
    mileage rate.

    Mallory paid $50 for parking and $25 for tolls for her business-related trips. She also had the
    following total expenses for operating her car for the year:
    Insurance ............................................................................... $432
    Registration ............................................................................. $75
    Interest on her car loan.......................................................... 
    Personal property tax ............................................................ $106

    Mallory also owns a truck, but she does not use it for business.

    Fundamentals of Tax Preparation Self-Employment | 10-29

    You might also like