James Jones is the owner of a small retail business operated as a sole proprietorship. During 2013, his business recorded the following items of income and expense:

  

      

    

a. Compute taxable income attributable to the sole proprietorship by completing Schedule C to be included in James’s 2013 Form 1040.  

b. Compute self-employment tax payable on the earnings of James’s sole proprietorship by completing a 2013 Schedule SE, Form 1040.

Revenue from inventory sales Cost of goods sold Business license tax Rent on retail space Supplies Wages paid to employees Payroll taxes Utilities $147,000 33,500 2,400 42,000 15,000 22,000 1,700 3,600