Comprehensive Problem $1-$ Part $2$: Schedule C$,$ Schedule SE$,$ Schedule D$,$ and Qualified Dividends and Capital Gains Tax Worksheet

Note: This problem is divided into three parts. You will need to complete some of the forms in the other parts in order to determine the amounts to be used on Form $1040.$ Some of the data information will be reproduced in the other parts for convenience.

Enter all amounts as positive numbers, except for a "loss". If required, enter a "loss" as a negative number on the tax form. If an amount box does not require an entry or the answer is zero, enter $"0".$ On Schedule SE$,$ when required, round amounts to the nearest dollar. Use the rounded amounts in subsequent computations.

Information regarding Noah's pet store business is reproduced here.

Noah's pet store is located at $1415$ S$.$ Patterson Blvd$,$ Dayton, OH $45409.$ The name of the store is "The Arc," and its taxpayer identification number is $95-9876556.$ Since you handle Noah's bookkeeping, you have printed the income statement from your Quickbooks software, shown in the table below.

The Arc

$95-9876556$

Income Statement

For the Year Ended December $31,2023$

Revenue:

Gross Sales $$150,500\mathrm{.}00$

Less: Sales Returns and Allowances $-$

Net Sales $$150,500\mathrm{.}00$

Cost of Goods Sold:

Beginning Inventory $$11,000\mathrm{.}00$

Add: Purchases $66,000\mathrm{.}00$

$$77,000\mathrm{.}00$

Less: Ending Inventory $10,200\mathrm{.}00$

Cost of Goods Sold $66,800\mathrm{.}00$

Gross Profit $($Loss$)$ $$83,700\mathrm{.}00$

Expenses:

Dues and Subscriptions $-$

Estimated Federal Tax Payments $4,100\mathrm{.}00$

Estimated State Tax Payments $3,800\mathrm{.}00$

Insurance $4,000\mathrm{.}00$

Meals and Entertainment $1,600\mathrm{.}00$

Miscellaneous $300\mathrm{.}00$

Payroll Taxes $4,000\mathrm{.}00$

Professional Fees $1,800\mathrm{.}00$

Rent $8,500\mathrm{.}00$

Travel $1,300\mathrm{.}00$

Utilities $1,500\mathrm{.}00$

Vehicle Expenses $-$

Wages $25,000\mathrm{.}00$

Total Expenses $55,900\mathrm{.}00$

Net Operating Income $$27,800\mathrm{.}00$

Details of The Arc's meals and entertainment:

$$500$ Meals associated with business travel

$300$ Arc employee holiday party

$200$ Overtime meals for employees

$600$ Sports tickets for entertaining large customers

$$1,600$

Question Content Area

Complete Schedule SE$.$ When required, round amounts to the nearest dollar. Use the rounded amounts in subsequent computations.

SCHEDULE SE

$($Form $1040)$

Department of the Treasury Internal Revenue Service Self$-$Employment Tax

Attach to Form $1040,1040-$SR$,$ or $1040-$NR$.$

Go to www$.$irs.gov$/$ScheduleSE for instructions and the latest information. OMB No$.1545-0074$

$2023$

Attachment

Sequence No$.17$

Name of person with self$-$employment income $($as shown on Form $1040,1040-$SR$,1040-$SS$,$ or $1040-$NR$)$

Noah Arc Social security number of person with self$-$employment income $434-11-3311$

Part I Self$-$Employment Tax

Note: If your only income subject to self$-$employment tax is church employee income, see instructions for how to report your income and the definition of church employee income.

A If you are a minister, member of a religious order, or Christian Science practitioner and you filed Form $4361,$ but you had $$400$ or more of other net earnings from self$-$employment, check here and continue with Part I $................................$

Skip lines $1$a and $1$b if you use the farm optional method in Part II$.$ See instructions.

$1$a Net farm profit or $($loss$)$ from Schedule F$,$ line $34,$ and farm partnerships, Schedule K$-1($Form $1065),$ box $14,$ code A $......................................................................1$a

b If you received social security retirement or disability benefits, enter the amount of Conservation Reserve Program payments included on Schedule F$,$ line $4$b$,$ or listed on Schedule K$-1($Form $1065),$ box $20,$ code AH $1$b $()$

Skip line $2$ if you use the nonfarm optional method in Part II$.$ See instructions.

$2$ Net profit or $($loss$)$ from Schedule C$,$ line $31$; and Schedule K$-1($Form $1065),$ box $14,$ code A $($other than farming$).$ See instructions for other income to report or if you are a minister or member of a religious order $2$ fill in the blank f$0$b$3$bdfac$00$b$069\_1$

$3$ Combine lines $1$a$,1$b$,$ and $2.........................................................3$ fill in the blank f$0$b$3$bdfac$00$b$069\_2$

$4$a If line $3$ is more than zero, multiply line $3$ by $92\mathrm{.}35\%(0\mathrm{.}9235).$ Otherwise, enter amount from line $3......4$a fill in the blank f$0$b$3$bdfac$00$b$069\_3$

Note: If line $4$a is less than $$400$ due to Conservation Reserve Program payments on line $1$b$,$ see instructions.

b If you elect one or both of the optional methods, enter the total of lines $15$ and $17$ here $...............4$b

c Combine lines $4$a and $4$b$.$ If less than $$400,$ stop; you don't owe self$-$employment tax. Exception: If less than $$400$ and you had church employee income, enter $-0-$ and continue $........................4$c fill in the blank f$0$b$3$bdfac$00$b$069\_4$

$5$a Enter your church employee income from Form W$-2$