Problem 3-1 Schedule C (LO 3.1, 3.3, 3.5, 3.7)

Scott Butterfield is self-employed as a CPA. He uses the cash method of accounting, and his Social Security number is 644-47-7833. His principal business code is 541211. Scott's CPA practice is located at 678 Third Street, Riverside, CA 92860. Scott's income statement for the year shows the following:

Income Statement
Scott Butterfield, CPA Income Statement 12/31/2019
	Current Period			Prior Period
	1/1/2019 to 12/31/2019			1/1/2018 to 12/31/2018
REVENUES
Tax Services	$76,123.00			$75,067.00
Accounting Services	49,001.00			48,860.00
Other Consulting Services	10,095.00			10,115.00
TOTAL REVENUES	135,219.00			134,042.00
COST OF SERVICES
Salaries	32,000.00			30,100.00
Payroll Taxes	2,868.00			2,387.00
Supplies	1,391.00			1,548.00
TOTAL COST OF SERVICES	36,259.00			34,035.00
GROSS PROFIT (LOSS)	98,960.00			100,007.00
OPERATING EXPENSES
Advertising and Promotion	300.00			350.00
Business Licenses and Permits	250.00			250.00
Charitable Contributions	425.00			275.00
Continuing Education	300.00			300.00
Dues and Subscriptions	3,500.00			3,500.00
Insurance	875.00			875.00
Meals and Entertainment	4,400.00			5,500.00
Office Expense	150.00			150.00
Postage and Delivery	50.00			50.00
Printing and Reproduction	100.00			100.00
Office Rent	14,000.00			14,000.00
Travel	865.00			865.00
Utilities	2,978.00			2,978.00
TOTAL OPERATING EXPENSES	28,193.00			29,193.00
NET INCOME (LOSS)	$70,767.00			$70,814.00

Scott also mentioned the following:

• The expenses for dues and subscriptions were his country club membership dues for the year.
• $300 of the charitable contributions were made to a political action committee.
• Scott does not generate income from the sale of goods and therefore does not record supplies and wages as part of cost of goods sold.
• Scott placed a business auto in service on January 1, 2016 and drove it 3,792 miles for business, 3,250 miles for commuting, and 4,500 miles for nonbusiness purposes. His wife has a car for personal use. He maintains written records for the business use of the car.

Complete Schedule C for Scott showing Scott's net taxable profit from self-employment. Assume Scott has evidence to support his deductions. If required, only use the minus sign to indicate a net loss. When required, round amounts to the nearest dollar.