a. Joe has signed a contract to sell gadgets to the city. The contract provides that sales of gadgets are dependent upon a test sample of gadgets operating successfully. In December of this year, Joe dellvers $12,350 worth of gadgets to the city that will be tested In March of next year. Joe purchased the gadgets especially for this contract and paId $8,950. b. Joe paid $225 In July of this year to entertain a visiting out-of-town client. The client didn't discuss business with Joe during this visit, but Joe wants to maintain good relations to encourage addltional business next year. c. On November 1 of this year, Joe paid $490 for premlums providing for $49,000 of "key man" Insurance on the Iffe of Joe's accountant over the next 12 months. d. At the end of this year, Joe's business reports $10,350 of accounts recelvable. Based upon past experience, Joe belleves that at least $2,270 of his new recelvables will be uncollectible. e. In December of this year, Joe rented equipment to complete a large job. Joe pald $4,350 in December because the rental agency required a minimum rental of three months ( $1,450 per month). Joe completed the job before year-end, but he returned the equipment at the end of the lease. f. Joe hired a new sales representative as an employee and sent her to Dallas for a week to contact prospectlve out-of-state clients. Joe ended up relmbursing his employee $390 for alrfare, $440 for lodging, and $340 for meals at restaurants (the sales representatlve provided adequate documentation to substantlate the business purpose for the meals). Joe requires the employee to account for all expenditures to be reimbursed. g. Joe uses his BMW (a personal auto) to travel to and from his residence to his factory. However, he switches to a business vehicle If he needs to travel after he reaches the factory. In September of this year, the business vehicle broke down and he was forced to use the BMW both to travel to and from the factory and to visit work sltes. He drove 165 miles visiting work sltes and 64 miles driving back and forth between the factory and his home. Joe uses the standard mileage rate to determine his auto-related business expenses. h. Joe paid a visit to his parents In Dallas over the Christmas holidays this year. While he was in the city, Joe spent $95 to attend a halfday business symposium. Joe pald $290 for alrfare, $86 for meals provided during the symposlum, and $47 on cab fare to the symposlum. Note: For all the transactions, select "No Effect" from the dropdown If no change In the taxable business Income. For part g, round your final answer to whole number. Use standard milleage rate. a. Joe has signed a contract to sell gadgets to the city. The contract provides that sales of gadgets are dependent upon a test sample of gadgets operating successfully. In December of this year, Joe dellvers $12,350 worth of gadgets to the city that will be tested In March of next year. Joe purchased the gadgets especially for this contract and paId $8,950. b. Joe paid $225 In July of this year to entertain a visiting out-of-town client. The client didn't discuss business with Joe during this visit, but Joe wants to maintain good relations to encourage addltional business next year. c. On November 1 of this year, Joe paid $490 for premlums providing for $49,000 of "key man" Insurance on the Iffe of Joe's accountant over the next 12 months. d. At the end of this year, Joe's business reports $10,350 of accounts recelvable. Based upon past experience, Joe belleves that at least $2,270 of his new recelvables will be uncollectible. e. In December of this year, Joe rented equipment to complete a large job. Joe pald $4,350 in December because the rental agency required a minimum rental of three months ( $1,450 per month). Joe completed the job before year-end, but he returned the equipment at the end of the lease. f. Joe hired a new sales representative as an employee and sent her to Dallas for a week to contact prospectlve out-of-state clients. Joe ended up relmbursing his employee $390 for alrfare, $440 for lodging, and $340 for meals at restaurants (the sales representatlve provided adequate documentation to substantlate the business purpose for the meals). Joe requires the employee to account for all expenditures to be reimbursed. g. Joe uses his BMW (a personal auto) to travel to and from his residence to his factory. However, he switches to a business vehicle If he needs to travel after he reaches the factory. In September of this year, the business vehicle broke down and he was forced to use the BMW both to travel to and from the factory and to visit work sltes. He drove 165 miles visiting work sltes and 64 miles driving back and forth between the factory and his home. Joe uses the standard mileage rate to determine his auto-related business expenses. h. Joe paid a visit to his parents In Dallas over the Christmas holidays this year. While he was in the city, Joe spent $95 to attend a halfday business symposium. Joe pald $290 for alrfare, $86 for meals provided during the symposlum, and $47 on cab fare to the symposlum. Note: For all the transactions, select "No Effect" from the dropdown If no change In the taxable business Income. For part g, round your final answer to whole number. Use standard milleage rate
