Ralph owns a sole proprietorship. During the year, the company had the following items of income:

Income from services provided by the company - $299,419

Bartering income (the FMV of the item received was $10,870, and the FMV of the services performed were $9,975)

A refund on supplies purchased in a prior year and were returned in the current year - $743

Ralph exchanged a toolbox used in his company for a larger toolbox owned by a neighboring business. The toolboxes were purchased within a year of each other. Ralphs basis in his toolbox was $8,250. The basis of the larger toolbox was $7,999. Ralph paid an attorney $1,100 to prepare the contract for the exchange. Ralph gave his toolbox to the other business on 12/15/2018. The other business gave Ralph the larger toolbox on 1/31/2019. What is the amount of income Ralphs business will report in the current tax year?

Select one:

a. $320,131

b. $311,032

c. $320,382

d. $310,289

Which of the following statements is true if a taxpayer chooses not to amortize his business start-up costs?

Select one:

a. He cannot ever recover the costs.

b. He cannot recover the start-up costs until he sells the business.

c. He can deduct them in full on the first tax return

d. He can wait to deduct the start-up costs until he needs the deduction

Amanda sells Mary Kay products and operates a very successful sole proprietorship. She had such an excellent 3rd quarter that she decided to make several purchases at the beginning of the 4th quarter. Which of the following expenses can she deduct?

Select one:

a. $110 for pink ink pens, small notepads and scissors (for party attendees to use and in keeping with the Mary Kay theme)

b. A pink designer purse (for Amanda to use and in keeping with the Mary Kay theme)

c. 30 of the most frequently ordered items to have on hand for quick delivery

d. A pink laptop (in keeping with the Mary Kay theme)

Bradley, an accountant, needed new office equipment. One of his clients owns a computer store and offered to provide the equipment of Bradleys choice in exchange for a full year of bookkeeping services. The estimated value of his services is $8,000. The FMV of the equipment is $7,500. Bradleys client paid $450 for shipping and taxes when he purchased the equipment. What is Bradleys basis in the office equipment?

Select one:

a. $7,950

b. $7,500

c. $8,450

d. $8,000