Jack, a geologist, had been debating for years whether or not to venture out on his own and operate his own business. He had developed a lot of solid relationships with clients, and he believed that many of them would follow him if he were to leave his current employer. As part of a New Year's resolution, Jack decided he would finally do it. Jack put his business plan together, and, on January 1 of this year, Jack opened his doors for business as a C corporation called Geo-Jack (GJ). Jack is the sole shareholder. Jack reported the following financial information for the year (assume GJ reports on a calendar year, uses the accrual method of accounting, and elects to account for inventory). 1. In January, GJ rented a small business office about 12 miles from Jack's home. GJ paid $13,300, which represented a damage deposit of $5,320 and rent for two years ($3,990 annually). 2. GJ earned and collected $345,000 performing geological-related services and selling its specialized digging tool. 3. GJ received $50 interest from municipal bonds and $2,210 interest from other investments. 4. GJ purchased some new equipment in February for $48,000. It claimed depreciation on these assets during the year in the amount of $7,365. 5. GJ paid $7,550 to buy luxury season tickets for Jack's parents for State U football games. 6. GJ paid Jack's father $12,200 for services that would have cost no more than $7,320 if Jack had hired any other local business to perform the services. While Jack's dad was competent, he does not command such a premium from his other clients. 7. In an attempt to get his name and new business recognized, GJ paid $7,550 for a one-page ad in the Geologic Survey. It also paid $16,100 in radio ads to be run through the end of December. 8. GJ leased additional office space in a building downtown. GJ paid rent of $29,750 for the year. 9. In November, Jack's office was broken into and equipment valued at $5,550 was stolen. The tax basis of the equipment was $6,050. Jack received $2,220 of insurance proceeds from the theft. 10. GJ incurred a $4,275 fine from the state government for digging in an unauthorized digging zone. 11. GJ contributed $3,220 to lobbyists for their help in persuading the state government to authorize certain unauthorized digging zones. 12. On July 1, GJ paid $1,800 for an 18-month insurance policy for its business equipment. The policy covers the period July 1 of this year through December 31 of next year. 13. GJ borrowed $20,000 to help with the company's initial funding needs. GJ used $2,000 of funds to invest in municipal bonds. At the end of the year, GJ paid the $1,200 of interest expense that accrued on the loan during the year. 14. Jack lives 12 miles from the office. He carefully tracked his mileage and drove his truck 6,280 miles between the office and his home. He also drove an additional 7,200 miles between the office and traveling to client sites. Jack did not use the truck for any other purposes. He did not keep track of the specific expenses associated with the truck. However, while traveling to a client site, Jack received a $205 speeding ticket. GJ reimbursed Jack for business mileage and for the speeding ticket. 15. GJ purchased two season tickets (20 games) to attend State U baseball games for a total of $1,320. Jack took existing and prospective clients to the games to maintain contact and find further work. This was very successful for Jack as GJ gained many new projects through substantial discussions with the clients following the games. 16. GJ paid $3,720 for meals when sales employees met with prospective clients. 17. GJ had a client who needed Jack to perform work in Florida. Because Jack had never been to Florida before, he booked an extra day and night for sightseeing. Jack spent $510 for airfare and booked a hotel for three nights ($175ight). (Jack stayed two days for business purposes and one day for personal purposes.) He also rented a car for $100 per day. The client arranged for Jack's meals while Jack was doing business, but GJ paid all expenses. 18. GJ paid a total of $21,000 of wages to employees during the year, and cost of goods sold was $26,000. Required: a. What is GJ's net business income for tax purposes for the year? Answer is complete but not entirel Complete this question by entering your answers in the tabs below. Required A Required B Required C Required D What is GI's net business income for tax purposes for the year? Net business income $ 185,750 X