Marty started a self-employed bakery business in a North Bay warehouse on March 1, and he has selected a fiscal year end of December 31. His business includes the baking and delivery of muffins and bagels to various coffee shops throughout the city.
Ma Bagels Statement of Income For the
Period March 1 to December 31

Notes:
(a) On March 1, Marty purchased a large gas oven, a computerized blender, and a used van for his business. Marty only used the van for deliveries. Assume the deductible CCA on this equipment is $2,400.
(b) Uncollectible bad debts are from Jo Jo's coffee shop. The owner has declared bankruptcy and the business closed on September 15.
(c) Meals and entertainment expenses were incurred in the attempt to gain new business with several coffee shops.
(d) Diane, Marty's spouse, worked full-time for Marty overseeing hiring, orders and delivery of all goods.
REQUIRED
Compute Marty's income from a business for tax purposes for the calendar year ending December 31.

Transcribed Image Text:

Gross revenue Cost of goods sold Gross profit Expenses: $340,000 (190,000) 150,000 Accounting amortization (Note a) Repairs and maintenance Annual tennis club dues $4,000 2,800 2,500 Uncollectible bad debts (Note b) Political donations Charitable donations Hotel and travel Meals and entertainment (Note c) Building rent Salary to spouse (Note d) 4,200 1,000 8,000 7,800 3,400 12,000 40,000 (85,700) Net income $64,300