Davy Jones needs to file taxes for his business and provides the following information.

Using your Tax Guide, you determine youre going to be required to prepare a Schedule C Profit or Loss form a Business and Schedule SE Self Employment Tax for Jones Sole Proprietorship.

Davy Jones Nautical Tours is owned and operated as a Sole proprietorship by David K Jones SSN

Principal Business or Professional Activity Code;

Principal business; Charter fishing tours

Employer Identification Number

Business address

North Harbor Drive

San Diego, CA

Home address

Lake Murray Blvd #

San Diego,

The cash accounting method is utilized

Jones did materially participate in the operation of the business

The business started January st

Wages consist of $ paid to one employee and $ to another.

Depreciation expense; Jones owns a fishing boat, The Jolly Roger, which he purchased for $ The depreciation on the income statement is book depreciation and will differ from what is actually used on Line Depreciation of form Schedule C

The boat is depreciated using the Modified Accelerated Cost Recovery System MACRS half year convention, is in its th year of service and the year recovery period is used. Use GDS and

Utilize Publication How to Depreciate Property to calculate the correct depreciation amount to enter on the Schedule C Locate Table A in the Appendix to calculate the taxdeductible depreciation.

Interest expense is interest paid on the loan for the boat.

Insurance payments were made to cover liability for guests and for the boat.

Payroll taxes; Federal Insurance Contributions Act FICA; Social Security and Medicare payments made on the behalf of employees.

Federal Insurance Contributions Act FUTA made on behalf of employees.

Travel was purely for business purposes.

Parking fines are tickets Jones received for parking illegally.

Lease expense was paid to Honda Motors for his mothers car lease, who is not involved in the business in any way.

Davy Jones Nautical Tours Income Statement Hint: This income statement may include accounts that are not considered business expenses.

Revenue

$

Wages

$

FICA

$

FUTA

$

Depreciation

$

Interest

$

Advertising

$

Supplies

$

Legal fees

$

Insurance

$

Boat slip rental

$

Travel

$

Office expense

$

Parking fines

$

Lease expense

$

Net Profit

$