Homework SourseComplete the reconciliation of book expenses to tax expenses
Complete the reconciliation of book expenses to tax expenses.
I was able to do everything else on my own exept the last part
thanks!!
Problem 3-1 (Algorithmic)
Schedule C (LO 3.1)
Scott Butterfield is self-employed as a CPA. He uses the cash method of accounting, and his Social Security number is 644-47-7833. His principal business code is 541211. Scott\'s CPA practice is located at 678 Third Street, Riverside, CA 92860. Scott’s income statement for the year shows the following:
Scott also mentioned the following:
The expenses for dues and subscriptions were his country club membership dues for the year.
The charitable contributions were made to a political action committee.
Scott does not generate income from the sale of goods and therefore does not record supplies and wages as part of cost of goods sold.
Scott placed a business auto in service on January 1, 2014 and drove it 6,667 miles for business, 4,000 miles for commuting, and 8,000 miles for nonbusiness purposes. His wife has a car for personal use.
Complete Schedule C for Scott showing Scott\'s net income from self-employment. Assume Scott has evidence to support his deductions. If required, only use the minus sign to indicate a net loss. When required, round amounts to the nearest dollar.
2017
Attachment
Sequence No. 09
Schedule C (Form 1040) 2017
I NEED HELP WITH THE FOLLOWING
Complete the reconciliation of book expenses to tax expenses.
| Income Statement | ||||
| Scott Butterfield, CPA Income Statement 12/31/2017 | ||||
| Current Period | Prior Period | |||
| 1/1/2017 to 12/31/2017 | 1/1/2016 to 12/31/2016 | |||
| REVENUES | ||||
| Tax Services | $254,800 | $72,154 | ||
| Accounting Services | 25,480 | 50,256 | ||
| Other Consulting Services | 56,056 | 7,690 | ||
| TOTAL REVENUES | 336,336 | 130,100 | ||
| COST OF SERVICES | ||||
| Salaries | 50,960 | 29,400 | ||
| Payroll Taxes | 2,387 | 2,275 | ||
| Supplies | 300 | 1,225 | ||
| TOTAL COST OF SERVICES | 53,647 | 32,900 | ||
| GROSS PROFIT (LOSS) | 282,689 | 97,200 | ||
| OPERATING EXPENSES | ||||
| Advertising and Promotion | 2,000 | – | ||
| Business Licenses and Permits | 620 | 250 | ||
| Charitable Contributions | 400 | 250 | ||
| Continuing Education | 1,500 | – | ||
| Dues and Subscriptions | 1,640 | 3,500 | ||
| Insurance | 15,288 | 870 | ||
| Meals and Entertainment | 11,466 | 5,400 | ||
| Office Expense | 5,096 | – | ||
| Postage and Delivery | 85 | – | ||
| Printing and Reproduction | 2,548 | – | ||
| Office Rent | 7,644 | 13,800 | ||
| Travel | 10,192 | 750 | ||
| Utilities | 3,058 | 2,724 | ||
| TOTAL OPERATING EXPENSES | 61,537 | 27,544 | ||
| NET INCOME (LOSS) | $221,152 | $69,656 |
Solution
Statement showing reconcilation of book expenses to tax expenses:
| Book Expenses (61,537 + 53,647) | 115,184 |
| Less: Expenses disallowed for tax | |
| Charitable Contibution | (400) |
| Dues & Subscription | (1,640) |
| Meals & Entertainment | (5,733) |
| Add: Additional expenses deducted for tax | |
| Car and Truck expenses | 3,567 |
| Total tax expenses | 110,978 |
