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 and uses the accrual method of accounting). a. In January, GJ rented a small business office about 12 miles from Jack's home. GJ paid $10,000, which represented a damage deposit of $4,000 and rent for two years ($3,000 annually). b. Glearned and collected $290,000 performing geological-related services and selling its specialized digging tool. c. GJ received $50 Interest from municipal bonds and $2.100 Interest from other Investments. d. GJ purchased some new equipment in February for $42500. It claimed depreciation on these assets under tax basis during the year in the amount of $6,540. e. GJ pald $7,000 to buy luxury season tickets for Jack's parents for State U football games. f. GJ pald Jack's father $10,000 for services that would have cost no more than $6,000 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. g. In an attempt to get his name and new business recognized, GJ pald $7,000 for a one-page ad in the Geologie Survey. It also pald $15,000 in radio ads to be run through the end of December h. GJ leased additional office space in a building downtown. G) pold rent of $27.000 for the year. 1. In November, Jack's office was broken into and equipment valued at $5,000 was stolen. The tax bosis of the equipment was $5,500. Jack received $2.000 of Insurance proceeds from the theft GJ incurred a $4,000 fine from the state government for digging in an unauthorized digging zone. k. GJ contributed $3,000 to lobbyists for their help in persuading the state government to authorize certain unguthorized digging zones. 1. 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. m. GJ borrowed $20.000 to help with the company's initial funding needs. G. used $2000 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 n. Jack lives 12 miles from the office. He carefully tracked his mileage and crove his truck 6.280 mile: between the office and his home. He also prove an additional 7.200 miles between the office and traveling to client sites. Jack did not use the track for any other purposes. He did not keep track of the specific expenses 5.sociated with the truck. However while traveling to a client site. Jack received a $150 speeding ticket GJ reimburses Jock for business miesge and for the speeding ticket. o. Gl purchased two season tickets (20 games) to streno State U beseba games for a tots of $1.100. Jack took eesting and prospective clients to the games to maintain contact and find further work. This was very successful for dock - GJ gained many new projects through substantial decussions with the clents following the games D. GJ paid $3.500 for mess when les employees met with prospective cients. 9. GJ hads ellent who needes Jack to perform work in Fonds. Because Jack has never been to Floriss before, he booked on extra day and night for sightseeing Jock spent $400 for single and booked a note for three nights 5120 night, ack stayed two days for business ourses and one day for personal purposes Hess rented car for $45 per day. The cilet arranged for Jack's mess wille Jack Wos doing business, but G pos expense GIDS state of $10.000 of wages to employees during the year and cost of goods 900 was $15,000. Regulred: .. Whetsmount will increase taxable composer que 350 e income negative for each of the bovescenarios b. As corporation coe: Gesreou ress: yes. Vous de c. GJ were sole proprietorshtoas requests yesrentoute d. Geregn corporation would see the end 30. What wouidite? Complete this question by entering your answers in the tabs below. What amount will increase taxable income positive or reduces taxable income native to each of the above scenarios Necative antishoud her cateva minute Enter som for non taal in Amount 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 and uses the accrual method of accounting). a. In January, GJ rented a small business office about 12 miles from Jack's home. GJ paid $10,000, which represented a damage deposit of $4,000 and rent for two years ($3,000 annually). b. Glearned and collected $290,000 performing geological-related services and selling its specialized digging tool. c. GJ received $50 Interest from municipal bonds and $2.100 Interest from other Investments. d. GJ purchased some new equipment in February for $42500. It claimed depreciation on these assets under tax basis during the year in the amount of $6,540. e. GJ pald $7,000 to buy luxury season tickets for Jack's parents for State U football games. f. GJ pald Jack's father $10,000 for services that would have cost no more than $6,000 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. g. In an attempt to get his name and new business recognized, GJ pald $7,000 for a one-page ad in the Geologie Survey. It also pald $15,000 in radio ads to be run through the end of December h. GJ leased additional office space in a building downtown. G) pold rent of $27.000 for the year. 1. In November, Jack's office was broken into and equipment valued at $5,000 was stolen. The tax bosis of the equipment was $5,500. Jack received $2.000 of Insurance proceeds from the theft GJ incurred a $4,000 fine from the state government for digging in an unauthorized digging zone. k. GJ contributed $3,000 to lobbyists for their help in persuading the state government to authorize certain unguthorized digging zones. 1. 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. m. GJ borrowed $20.000 to help with the company's initial funding needs. G. used $2000 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 n. Jack lives 12 miles from the office. He carefully tracked his mileage and crove his truck 6.280 mile: between the office and his home. He also prove an additional 7.200 miles between the office and traveling to client sites. Jack did not use the track for any other purposes. He did not keep track of the specific expenses 5.sociated with the truck. However while traveling to a client site. Jack received a $150 speeding ticket GJ reimburses Jock for business miesge and for the speeding ticket. o. Gl purchased two season tickets (20 games) to streno State U beseba games for a tots of $1.100. Jack took eesting and prospective clients to the games to maintain contact and find further work. This was very successful for dock - GJ gained many new projects through substantial decussions with the clents following the games D. GJ paid $3.500 for mess when les employees met with prospective cients. 9. GJ hads ellent who needes Jack to perform work in Fonds. Because Jack has never been to Floriss before, he booked on extra day and night for sightseeing Jock spent $400 for single and booked a note for three nights 5120 night, ack stayed two days for business ourses and one day for personal purposes Hess rented car for $45 per day. The cilet arranged for Jack's mess wille Jack Wos doing business, but G pos expense GIDS state of $10.000 of wages to employees during the year and cost of goods 900 was $15,000. Regulred: .. Whetsmount will increase taxable composer que 350 e income negative for each of the bovescenarios b. As corporation coe: Gesreou ress: yes. Vous de c. GJ were sole proprietorshtoas requests yesrentoute d. Geregn corporation would see the end 30. What wouidite? Complete this question by entering your answers in the tabs below. What amount will increase taxable income positive or reduces taxable income native to each of the above scenarios Necative antishoud her cateva minute Enter som for non taal in Amount