Question
Problem 3-1 Schedule C (LO 3.1) Scott Butterfield is self-employed as a CPA. He uses the cash method of accounting, and his Social Security number
Problem 3-1 Schedule C (LO 3.1)
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. Scotts income statement for the year shows the following:
Income Statement | ||||||
Scott Butterfield, CPA Income Statement 12/31/2017 | ||||||
Current Period | Prior Period | |||||
1/1/2017 to 12/31/2017 | 1/1/2016 to 12/31/2016 | |||||
REVENUES | ||||||
Tax Services | $75,067.00 | $72,154.00 | ||||
Accounting Services | 48,860.00 | 50,256.00 | ||||
Other Consulting Services | 10,115.00 | 7,690.00 | ||||
TOTAL REVENUES | 134,042.00 | 130,100.00 | ||||
COST OF SERVICES | ||||||
Salaries | 30,100.00 | 29,400.00 | ||||
Payroll Taxes | 2,387.00 | 2,275.00 | ||||
Supplies | 1,548.00 | 1,225.00 | ||||
TOTAL COST OF SERVICES | 34,035.00 | 32,900.00 | ||||
GROSS PROFIT (LOSS) | 100,007.00 | 97,200.00 | ||||
OPERATING EXPENSES | ||||||
Advertising and Promotion | 350.00 | |||||
Business Licenses and Permits | 250.00 | 250.00 | ||||
Charitable Contributions | 275.00 | 250.00 | ||||
Continuing Education | 300.00 | |||||
Dues and Subscriptions | 3,500.00 | 3,500.00 | ||||
Insurance | 875.00 | 870.00 | ||||
Meals and Entertainment | 5,500.00 | 5,400.00 | ||||
Office Expense | 150.00 | |||||
Postage and Delivery | 50.00 | |||||
Printing and Reproduction | 100.00 | |||||
Office Rent | 14,000.00 | 13,800.00 | ||||
Travel | 865.00 | 750.00 | ||||
Utilities | 2,978.00 | 2,724.00 | ||||
TOTAL OPERATING EXPENSES | 29,193.00 | 27,544.00 | ||||
NET INCOME (LOSS) | $70,814.00 | $69,656.00 |
Scott also mentioned the following:
The expenses for dues and subscriptions were his country club membership dues for the year.
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, 2014 and drove it 3,901 miles for business, 3,250 miles for commuting, and 4,500 miles for nonbusiness purposes. His wife has a car for personal use.
Complete Schedule C for Scott showing Scott's net income 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.
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