k. GJ contributed $3,500 to lobbyists for their help in persuading the state government to authorize certain unauthorized 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. GJ used $2,000 of funds to invest in municipar 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 drove his truck 6,280 miles between the office and his home. He also drove an additional 7.200 miles traveling between the office and 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 recelved a $275 speeding ticket. GJ reimbursed Jack for business mileage and for the speeding ticket. 0. GJ purchased two season tickets (20 games) to attend State University baseball games for a total of $1,600. 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. p. GJ paid $4,000 for meals when sales employees met with prospective clients. q. GJ had a client who rieeded Jack to perform work in Florida. Because Jacik had never been to Florida before, he boked an extra day and night for sightseeing. Jack spent $650 for aiffare and booked a notel for three nights ( $245 per night). (Jack stayed two days for business purposes and one day for personal purposes.) He also rented a cos for $170 per day. The client provided Jack's meals while Jack was doing business, but GJ pald all expenses. a. What is GJ's net business income for tax purposes for the year? b. As a C corporation, does GJ have a required tax year? If so, what would it be? c. If GJ were a sole proprietorship, would it have a required tax year-end? If so, what would it be? d. If GJ were an $ corporation, would it have a required tax year-end? If so, what would it be? Complete this question by entering your answers in the tabs below. What is GI's net business income for tax purposes for the year? 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). a. In January, GJ rented a small business office about 12 miles from Jack's home. GJ paid \$17,500, which represented a damage deposit of $7,000 and rent for two years ($5,250 annually). b. GJ earned and collected $415,000 performing geological-related services and selling its specialized digging tool. c. GJ recelved $65 interest from municipal bonds and $2,350 interest from other investments. d. GJ purchased some new equipment in February for $55.000. It claimed depreciation on these assets during the year in the amount of $8,415. e. GJ paid $8,250 to buy luxury season tickets for Jack's parents for State University football games. 1. GJ pald Jack's father $15,000 for services that would have cost no more than $9.000 if Jack had hired any other local business to perform the services. While Jack's dad was competent, he does not command such a premlum from his other clients. 0. In an attempt to get his name and new business recognized, GJ paid $8,250 for a one-page ad in the Geologic Survey, It also paid $17,500 in radio ads to be run through the end of December: h. GJ leased additional office space in a bulding downtown. GJ paid rent of $33.250 for the year. 1. In Noveriber, Jack's office was broken into and equipment vafued at $6,250 was sto len. The tax basis of the equipment was $6.750. Jack received $2,500 of insurance proceeds from the theft. 1. GJ incurred o $4,625 fine from the state goverament for digging in an unauthorized digging zone