Jordan (single, age 30), a real estate broker (self-employed), had the following income and expenses: Commission income

180,000

Medical insurance premium paid for his staff

10,000

Office staff salary expense

40,000

Medical insurance premium paid for himself

7,000

Office rental expense

30,000

Unreimbursed medical expenses paid for himself

5,000

Which of the following statement is correct?

A. Jordan will report $93,000 as his business income (from Schedule C) and his AGI is $88,000.
B. Jordan will report $100,000 as his business income (from Schedule C) and his AGI is 93,000.
C. Jordan will report $110,000 as his business income (from Schedule C) and his AGI is $95,870.
D. Jordan will report $100,000 as his business income (from Schedule C) and his AGI is $80,935.
E. Jordan will report $100,000 as his business income (from Schedule C) and his AGI is $85,935.

Answers

Answer 1
Answer:

Given:

Commission income  = $180,000

Medical insurance =  $10,000

Salary expense  = $40,000

Medical insurance premium paid for himself  = $7,000

Office rental expense  = $30,000

Medical expenses paid for himself  = 5,000

Computation of business income:

Business income = Total revenue - Total expenses

Business income = $180,000 - ($10,000 - $40,000 - $30,000)

Business income = $180,000 - $80,000

Business income = $100,000

Note: Self-incurred expenses are not included in business expenses.

Computation of AGI:

AGI = Business income - Deduction from schedule c

AGI = $100,000 - Medical insurance premium paid for himself  

AGI = $100,000 - $7,000

AGI = $93,000

Therefore, option "B" is the correct answer to the following question.

Answer 2
Answer:

Final answer:

Jordan's business income is $100,000 (derived from his commission income minus his business expenses) and his Adjusted Gross Income is $93,000 (calculated as business income minus personal deductions). Hence, Option B is the correct answer.

Explanation:

Jordan's business income can be calculated as his commission income minus his business expenses. His business expenses consists of medical insurance premiums for his staff, office staff salary, and office rental expense. Therefore, his business income would be $180,000 - ($10,000 + $40,000 + $30,000) = $100,000. Adjusted Gross Income (AGI) is calculated as business income minus personal deductions. In Jordan's case, he has a personal deduction of $7,000 (medical insurance premium paid for himself). Thus, his AGI would be $100,000 - $7,000 = $93,000. Therefore, the correct answer is B: Jordan will report $100,000 as his business income (from Schedule C) and his AGI is $93,000.

Learn more about Self-Employment Income Calculation here:

brainly.com/question/37317339

#SPJ12


Related Questions

Mary, a merchant, was in the business of selling flowers to local florists. Melissa was the owner of Little Flower, Inc. and she regularly purchased her flowers from Mary. One day, Melissa called Mary and ordered 20 dozen roses, 15 dozen carnations, 10 dozen daisies, baby breaths, 6 dozen tulips, and some plants. Everything totaled $1,200, and was to be delivered in 14 days. After the two ended their call, Mary sent Melissa an e-mail detailing the order and her acceptance. Melissa never responded to the e-mail. Eleven days later, Mary delivered the merchandise to Melissa, but she refused shipment. Mary sued Melissa for breach of contract. What is the likely result? Mary wins because the contract involved specially manufactured goods. Mary loses because Melissa did not sign anything. Mary loses because the contract was not in writing. Mary wins because Melissa failed to object to the merchant's confirmation memorandum.
Stanford issues bonds dated January 1, 2019, with a par value of $248,000. The bonds’ annual contract rate is 7%, and interest is paid semiannually on June 30 and December 31. The bonds mature in three years. The annual market rate at the date of issuance is 10%, and the bonds are sold for $229,1151. What is the amount of the discount on these bonds at issuance?2. How much total bond interest expense will be recognized over the life of these bonds?3. Prepare an effective interest amortization table for these bonds.
Select all that apply.Select the items that describe wants (not needs).latest laptopmost expensive shoesextra pair of jeanswater
Jordan has the following assets and liabilities:_______. Two cars $10,000 House $200,000 Mortgage $100,000 Cash $1,000 Car loans $3,000 Checking account balance $2,000 Credit card balance $1,000 What is Jordan’s wealth?a. $107,000b. $213,000c. $109,000d. $111,000
Crawl Inc., has 1,000 shares of 6%, $50 par value, cumulative preferred stock and 50,000 shares of $1 par value common stock outstanding at December 31, 2017, and December 31, 2018. The board of directors declared and paid a $2,000 dividend in 2017. In 2018, $10,000 of dividends are declared and paid. What are the dividends received by the common stockholders in 2018

Soriano Company had net sales of $300,000 for the month (after returns and allowances of $1,500 and sales discounts of $3,250). Beginning inventory for the month was $60,000; purchases for the month were $175,000; and gross profit was 43%. What was the ending inventory for the month?

Answers

Answer:

Ending Inventory  $ 64,000

Explanation:

To define the final inventory of the company it's necessary to find the cost of good of the period.  

As the company had a 43% of gross profit, it means that for every dollar of sales we have 0,43 dollar of Gross Profit, with this value is possible to know the total cost of the goods sold during the period, that it's the difference between Sales Revenue and Gross Profit.  

Total Sales Revenue had to be the net value after returns and discounts as it's detailed.  

Income Statement  

Sales revenue        $ 300,000  

Cost of goods sold  -$ 171,000  

Gross Profit            $ 129,000 43%

Beginning Inventory  $ 60,000

Purchases                  $ 175,000

Cost of goods sold  -$ 171,000

Ending Inventory    $ 64,000

What is the overall rate of return on a $155,000 investment that returns 23% on the first $15,000 and 16% on the remaining money

Answers

Answer:

The  overall rate of return is 16.67%

Explanation:

The computation of the overall rate of return is shown below:

= Actual amount return ÷ investment amount

= ($15,000 × 23% + $140,000 × 16%) ÷ ($155,000)

= ($3,450 + $22,400)  ÷ ($155,000)

= ($25,850) ÷ ($155,000)

= 16.67%

Hence, the  overall rate of return is 16.67%

We simply applied the above formula and the same is to be considered

To judge whether a particular diversification move has good potential for building added shareholder value, the move should pass the following tests:___________. A) the attractiveness test, the barrier-to-entry test, and the growth test.
B) the strategic fit test, the resource fit test, and the profitability test.
C) the barrier-to-entry test, the growth test, and the shareholder value test.
D) the attractiveness test, the cost-of-entry test, and the better-off test.
E) the resource fit test, the strategic fit test, the profitability test, and the shareholder value test.

Answers

Answer:

D) the attractiveness test, the cost-of-entry test, and the better-off test.

Explanation:

To judge a diversification change, an organization needs to pass the attractiveness tests, the entry cost test and the best situation test.

These tests will be decisive to analyze the potential that diversification will have to create added value for the shareholder.

The attractiveness test will list the ability that the market has to ensure that there is a safe return on investments.

The cost-of-entry will aim to ensure that when entering a new sector, the organization does not have higher costs that can influence the generation of profitability.

Finally, the better-off test will analyze whether the planned diversification will be so profitable that it will help to improve the performance of the integration of organizational businesses.

Answer:

OPTION d

Explanation:

he Top Hat Division of​ Blandon's Fine Menswear had the following results last year​ (in thousands). Sales $ 4 comma 600 comma 000 Operating income $ 690 comma 000 Total assets $ 2 comma 000 comma 000 Current liabilities $ 210 comma 000 ​Management's target rate of return is 14​% and the weighted average cost of capital is 10​%. What is the Top Hat​ Division's Residual Income​ (RI)?

Answers

Answer:

$410,000

Explanation:

Residual income = operating income - (rate of return*average operating assets)

= $690,000-(14%*$2,000,000)

=$690,000-$280,000

=$410,000

Therefore the Top Hat​ Division's Residual Income​ (RI) would be $410,000

Fig Garden is a popular chain of restaurants for authentic Italian food. Recently, a customer found a dead insect in the pasta he was served. The customer's negative review about the restaurant went viral. Fig Garden's chief executive officer (CEO) publicly apologized for the mishap and posted pictures of the restaurant's kitchen, after being fumigated, on several social networking websites. In this scenario, which of the following does Fig Garden's CEO demonstrate? A. Audience control
B. Crisis management
C. Letharsy
D. Experiential selling

Answers

Answer:

B. Crisis management

Explanation:

In this scenario, the CEO of Fig Garden demonstrates crisis management, which is a strategy used by organizations when there is a negative situation that involves the company and can put their credibility at risk with their stakeholders.

In crisis management, there is the development of a plan that seeks to solve and minimize the negative impacts caused by a problem, anticipating solutions and reducing the negative impacts caused in the internal or external environment of the organization. Crisis management is pre-planning that helps companies to act more effectively in business when there is a crisis that they need to deal with quickly.

The following information pertains to Lightning Inc., at the end of the year:Credit Sales $75,000
Accounts Payable 13,900
Accounts Receivable 8,200
Allowance for Uncollectible Accounts $900 credit
Cash Sales 24,000
Lightning uses the percentage-of-credit-sales method and estimates 4% of sales are uncollectible. What is the ending balance of the allowance account after the year-end adjustment?
$3,900
$4,860
$3,000
$2,100

Answers

Answer:

$3900

Explanation:

Calculation to determine the ending balance of the allowance account after the year-end adjustment

Balance in allowance for uncollectible account$ 900

Add Bad debts during the period $3,000

($75,000*4%)

Ending Balance in allowance for uncollectible account$ 3,900

($900+$3,000)

Therefore the ending balance of the allowance account after the year-end adjustment is $3900

Other Questions