Ben teaches golf lessons at a country club under a business called Bens Pure Swings (BPS). He operates this business as a sole proprietorship on the accrual basis of accounting. Use the following accounting information for BPS to complete the firms Schedule C: This year BPS billed clients for $86,700 and collected $61,000 in cash for golf lessons completed during the year. In addition, BPS collected an additional $14,500 in cash for lessons that will commence after year-end. Ben hopes to collect about half of the outstanding billings next year but the rest will likely be written off. Besides providing private golf lessons, BPS also contracted with the country club to staff the driving range. This year BPS billed the country club $27,200 for the service. The club paid $17,000 of the amount but disputed the remainder. By year end the dispute had not been resolved, and while Ben believes he is entitled to the money, he has still not collected the remaining $10,200. BPS has accrued the following expenses (explained below): Advertising (in the clubhouse) $ 13,150 Pro golf teachers membership fees 860 Supplies (golf tees, balls, etc.) 4,720 Club rental 6,800 Malpractice insurance 2,400 Accounting fees 8,820 The expenditures were all paid for this calendar year with several exceptions. First, Ben initiated his golfers malpractice insurance on June 1 of this year. The $2,400 insurance bill covers the last six months of this calendar year and the first six months of next year. At year-end, Ben had only paid $600, but he has assured the insurance agent he will pay the remaining $1,800 early next year. Second, the amount paid for club rental ($100 per week) represents rental charges for the last 6 weeks of the previous year, for the 52 weeks in this calendar year, and the first 10 weeks of next year. Ben has also mentioned that BPS only pays for supplies that are used at the club. Although BPS could buy the supplies for half the cost elsewhere, Ben likes to throw some business to the golf pro shop because it is operated by his brother. Fill out a draft of Parts I and II on the front page of a Schedule C for BPS. Under the accrual method, revenues are generally recorded under the all-events test as earned or received. Hence, unless the deferral method election has been made, BPS will recognize $101,200 of lesson revenue ($86,700 plus $14,500) this year. BPS will only recognize $17,000 of driving range revenue because the remaining amount of the income is not fixed and determinable. Regarding deductions, BPS cannot claim a deduction for estimated uncollectible accounts because direct write-off is the method dictated by the IRC. BPS paid $600 of insurance premiums and is liable for $600 of the remaining premiums. However, insurance is a payment liability and only payment satisfies economic performance. Unless BPS has elected to account for the insurance as a recurring item, the deduction is limited to $600 (the insurance would only qualify for the 12-month rule if economic performance has been met). Under the accrual method and economic performance rent is deducted over the term of the lease. Hence, BPS can only deduct the club rents relating to the current year ($100 x 52). Finally, it would appear that half of the cost of supplies is not deductible because it is unreasonable in amount. There are no apparent problems with deducting the payments for advertising, membership fees, or accounting fees. Complete a Schedule C for 2018 using 2019 tax rules.

WILL LEAVE POSITIVE FEEDBACK. MUST COMPLETE THE SCHEDULE C LIKE ATTACHED IN PHOTOS.

SCHEDULE C (Form 1040) Department of the Treasury Internal Revenue Service (89) Name of proprietor Profit or Loss From Business OMB No. 1545-0074 (Sole Proprietorship) Go to www.irs.gov/Schedule for instructions and the latest information. 2018 Attach to Form 1040, 1040NR, or 1041; partnerships generally must file Form 1065. Sequence No. 09 Social security number (SSN) Attachment A Principal business or profession, including product or service (see instructions) B Enter code from instructions Business name. If no separate business name, leave blank. D Employer ID number (EIN) (see instr.) DOO 0 0 - 1 6 20 10 E Business address (including suite or room no.) City, town or post office, state, and ZIP code F Accounting method: (1) Cash (2) Accrual (3) Other (specify) G Did you "materially participate in the operation of this business during 2018? If "No," see instructions for limit on losses Yes No H If you started or acquired this business during 2018, check here. Did you make any payments in 2018 that would require you to file Form(s) 1099? (see instructions) Yes No If "Yes," did you or will you file required Forms 1099? Yes No PartIncome Gross receipts or sales. See instructions for line 1 and check the box if this income was reported to you on Form W-2 and the "Statutory employee" box on that form was checked 1 2 Returns and allowances 2 3 Subtract line 2 from line 1 3 4 Cost of goods sold (from line 42) 4 5 Gross profit. Subtract line 4 from line 3 5 6 Other income, including federal and state gasoline or fuel tax credit or refund (see instructions) 7 Gross income. Add lines 5 and 6 7 Part II Expenses. Enter expenses for business use of your home only on line 30. 8 Advertising 8 18 Office expense (see instructions) 18 9 Car and truck expenses (see 19 Pension and profit-sharing plans 19 instructions).. Rent or lease (see instructions) 10 Commissions and fees a Vehicles, machinery, and equipment 20a 11 Contract labor (see instructions) 11 b Other business property 20b 12 Depletion 12 21 Repairs and maintenance 21 13 Depreciation and section 179 22 Supplies (not included in Part III) 22 expense deduction (not included in Part III) (see 23 Taxes and licenses 23 instructions). . 13 24 Travel and meals: 14 Employee benefit programs a Travel 24a (other than on line 19) 14 b Deductible meals (see 15 Insurance (other than health) 15 instructions) 24b 16 Interest (see instructions: 25 25 a Mortgage (paid to banks, etc.) 16a 26 Wages (less employment credits). 26 b Other 16b 27a Other expenses (from line 48) 27a 17 Legal and professional services 17 Reserved for future use 27b 28 Total expenses before expenses for business use of home. Add lines 8 through 27a . 28 29 Tentative profit or (loss). Subtract line 28 from line 7. 29 30 Expenses for business use of your home. Do not report these expenses elsewhere. Attach Form 8829 unless using the simplified method (see instructions). Simplified method filers only: enter the total square footage of: (a) your home: and (b) the part of your home used for business: Use the Simplified Method Worksheet in the instructions to figure the amount to enter on line 30 30 31 Net profit or loss). Subtract line 30 from line 29. If a profit, enter on both Schedule 1 (Form 1040), line 12 (or Form 1040NR, line 13) and on Schedule SE, line 2. If you checked the box on line 1, see instructions. Estates and trusts, enter on Form 1041, line 3. 31 If a loss, you must go to line 32. 32 If you have a loss, check the box that describes your investment in this activity (see instructions). If you checked 32a, enter the loss on both Schedule 1 (Form 1040), line 12 (or Form 1040NR, line 13) and on Schedule SE, line 2. (If you checked the box on line 1, see the line 31 instructions). 32a All investment is at risk. Estates and trusts, enter on Form 1041, line 3. 32b Some investment is not If you checked 32b, you must attach Form 6198. Your loss may be limited. at risk. For Paperwork Reduction Act Notice, see the separate instructions. Cat. No. 11334P Schedule C (Form 1040) 2018 Utilities b Page 2 Schedule C (Form 1040) 2018 Part III Cost of Goods Sold (see instructions) 33 34 Method(s) used to value closing inventory: Cost b Lower of cost or market Other (attach explanation) Was there any change in determining quantities, costs, or valuations between opening and closing inventory? If "Yes," attach explanation Inventory at beginning of year. If different from last year's closing inventory, attach explanation Yes No 35 35 36 Purchases less cost of items withdrawn for personal use 36 37 Cost of labor. Do not include any amounts paid to yourself 37 38 Materials and supplies 38 Other costs 39 39 10 Add lines 35 through 39 40 41 42 42 41 Inventory at end of year Cost of goods sold. Subtract line 41 from line 40. Enter the result here and on line 4. Part IV Information on Your Vehicle. Complete this part only if you are claiming car or truck expenses on line 9 and are not required to file Form 4562 for this business. See the instructions for line 13 to find out if you must file Form 4562 43 When did you place your vehicle in service for business purposes? (month, day, year) 44 a Of the total number of miles you drove your vehicle during 2018, enter the number of miles you used your vehicle for: Business b Commuting (see instructions) c Other Was your vehicle available for personal use during off-duty hours? 45 Yes No 46 Yes No Do you (or your spouse) have another vehicle available for personal use? 47a Do you have evidence to support your deduction? Yes No Yes No bf "Yes," is the evidence written? Part V Other Expenses. List below business expenses not included on lines 8-26 or line 30. 48 Total other expenses. Enter here and on line 27a 48 Schedule C (Form 1040) 2018 SCHEDULE C (Form 1040) Department of the Treasury Internal Revenue Service (89) Name of proprietor Profit or Loss From Business OMB No. 1545-0074 (Sole Proprietorship) Go to www.irs.gov/Schedule for instructions and the latest information. 2018 Attach to Form 1040, 1040NR, or 1041; partnerships generally must file Form 1065. Sequence No. 09 Social security number (SSN) Attachment A Principal business or profession, including product or service (see instructions) B Enter code from instructions Business name. If no separate business name, leave blank. D Employer ID number (EIN) (see instr.) DOO 0 0 - 1 6 20 10 E Business address (including suite or room no.) City, town or post office, state, and ZIP code F Accounting method: (1) Cash (2) Accrual (3) Other (specify) G Did you "materially participate in the operation of this business during 2018? If "No," see instructions for limit on losses Yes No H If you started or acquired this business during 2018, check here. Did you make any payments in 2018 that would require you to file Form(s) 1099? (see instructions) Yes No If "Yes," did you or will you file required Forms 1099? Yes No PartIncome Gross receipts or sales. See instructions for line 1 and check the box if this income was reported to you on Form W-2 and the "Statutory employee" box on that form was checked 1 2 Returns and allowances 2 3 Subtract line 2 from line 1 3 4 Cost of goods sold (from line 42) 4 5 Gross profit. Subtract line 4 from line 3 5 6 Other income, including federal and state gasoline or fuel tax credit or refund (see instructions) 7 Gross income. Add lines 5 and 6 7 Part II Expenses. Enter expenses for business use of your home only on line 30. 8 Advertising 8 18 Office expense (see instructions) 18 9 Car and truck expenses (see 19 Pension and profit-sharing plans 19 instructions).. Rent or lease (see instructions) 10 Commissions and fees a Vehicles, machinery, and equipment 20a 11 Contract labor (see instructions) 11 b Other business property 20b 12 Depletion 12 21 Repairs and maintenance 21 13 Depreciation and section 179 22 Supplies (not included in Part III) 22 expense deduction (not included in Part III) (see 23 Taxes and licenses 23 instructions). . 13 24 Travel and meals: 14 Employee benefit programs a Travel 24a (other than on line 19) 14 b Deductible meals (see 15 Insurance (other than health) 15 instructions) 24b 16 Interest (see instructions: 25 25 a Mortgage (paid to banks, etc.) 16a 26 Wages (less employment credits). 26 b Other 16b 27a Other expenses (from line 48) 27a 17 Legal and professional services 17 Reserved for future use 27b 28 Total expenses before expenses for business use of home. Add lines 8 through 27a . 28 29 Tentative profit or (loss). Subtract line 28 from line 7. 29 30 Expenses for business use of your home. Do not report these expenses elsewhere. Attach Form 8829 unless using the simplified method (see instructions). Simplified method filers only: enter the total square footage of: (a) your home: and (b) the part of your home used for business: Use the Simplified Method Worksheet in the instructions to figure the amount to enter on line 30 30 31 Net profit or loss). Subtract line 30 from line 29. If a profit, enter on both Schedule 1 (Form 1040), line 12 (or Form 1040NR, line 13) and on Schedule SE, line 2. If you checked the box on line 1, see instructions. Estates and trusts, enter on Form 1041, line 3. 31 If a loss, you must go to line 32. 32 If you have a loss, check the box that describes your investment in this activity (see instructions). If you checked 32a, enter the loss on both Schedule 1 (Form 1040), line 12 (or Form 1040NR, line 13) and on Schedule SE, line 2. (If you checked the box on line 1, see the line 31 instructions). 32a All investment is at risk. Estates and trusts, enter on Form 1041, line 3. 32b Some investment is not If you checked 32b, you must attach Form 6198. Your loss may be limited. at risk. For Paperwork Reduction Act Notice, see the separate instructions. Cat. No. 11334P Schedule C (Form 1040) 2018 Utilities b Page 2 Schedule C (Form 1040) 2018 Part III Cost of Goods Sold (see instructions) 33 34 Method(s) used to value closing inventory: Cost b Lower of cost or market Other (attach explanation) Was there any change in determining quantities, costs, or valuations between opening and closing inventory? If "Yes," attach explanation Inventory at beginning of year. If different from last year's closing inventory, attach explanation Yes No 35 35 36 Purchases less cost of items withdrawn for personal use 36 37 Cost of labor. Do not include any amounts paid to yourself 37 38 Materials and supplies 38 Other costs 39 39 10 Add lines 35 through 39 40 41 42 42 41 Inventory at end of year Cost of goods sold. Subtract line 41 from line 40. Enter the result here and on line 4. Part IV Information on Your Vehicle. Complete this part only if you are claiming car or truck expenses on line 9 and are not required to file Form 4562 for this business. See the instructions for line 13 to find out if you must file Form 4562 43 When did you place your vehicle in service for business purposes? (month, day, year) 44 a Of the total number of miles you drove your vehicle during 2018, enter the number of miles you used your vehicle for: Business b Commuting (see instructions) c Other Was your vehicle available for personal use during off-duty hours? 45 Yes No 46 Yes No Do you (or your spouse) have another vehicle available for personal use? 47a Do you have evidence to support your deduction? Yes No Yes No bf "Yes," is the evidence written? Part V Other Expenses. List below business expenses not included on lines 8-26 or line 30. 48 Total other expenses. Enter here and on line 27a 48 Schedule C (Form 1040) 2018