Lee, a programmer, earned $35,000 in 2010, but in 2011, he began to manufacture body boards. After one year, he submitted the following data to his accountant.

• He stopped renting out his cottage for $3,500 a year and used it as his factory. The market value of the cottage increased from $70,000 to $71,000.

• He spent $50,000 on materials, phone, utilities, etc.

• He leased machines for $10,000 a year.

• He paid $15,000 in wages.

• He used $10,000 from his savings account, which pays 5 percent a year interest.

• He borrowed $40,000 at 10 percent a year from the bank.

• He sold $160,000 worth of body boards.

• Normal profit is $25,000 a year.