Rex loves to work with his hands and is very good at making small figurines. Three years ago, Rex opened Bronze Age Minlatures (BAM) for business as a sole proprletorship. BAM produces minlature characters ranging from scl-fi characters (his favorite) to historical characters like George Washington (the most popular). Business has been golng very well for hIm, and he has provided the following Information relating to his business. Requlred: a. Rex recelved approval from the IRS to switch from the cash method of accounting to the accrual method of accounting effectlve January 1 of this year. At the end of last year, BAM reported accounts recelvable that had not been Included in Income under the accrual method of $14,900 and accounts payable that had not been deducted under the accrual method of $6,250. b. In March, BAM sold 9,700 mInlature historical figures to History R Us Incorporated (HRU), a retaller of historlcal artifacts and figurines, for $242,500. c. HRU was so Impressed with the figurines that It purchased In March that It wanted to contract with BAM to continue to produce the figurines for It for the next three years. HRU paid BAM $430,056 ( $22 per figurlne) on October 30 of this year to produce 543 figurines per month for 36 months beginning on November 1 of thls year. BAM delivered 543 figurines on November 30 and agaln on December 30. Rex elects to use the deferral method to account for the transaction. d. Though the scl-fi figurines were not qulte as popular, BAM sold 447 figurines at a scl-fi convention In April. Rex accepted cash only and recelved $16,539 for these sales. e. In January, BAM determIned that It would not be able to collect on $4,500 of Its beginning-of-the-year recelvables, so It wrote off $4,500 of speclfic recelvables. BAM sold 147,000 other figurlnes on credit for $323,400. BAM estimates that It will be unable to collect 5 percent of the sales revenue from these sales, but It has not been able to specifically Identify any accounts to wrlte off. f. Assume that BAM correctly determIned that Its cost of goods sold using an approprlate Inventory method Is $226,380 thls year. g. The scl-fi convention In April was held In Chicago, Illinols. Rex attended the conventlon because he felt It was a good opportunity to galn new customers and to get new Ideas for figurlnes. He pald $610 round-trip alrfare, $165 for entrance to the conventlon, $222 for lodging, $68 for cab fare, and $164 for meals at restaurants durlng the trip. He was busy with business actlvitles the entire trip. h. On August 1, BAM purchased a 12-month Insurance policy that covers Its business property for accidents and casualties through July 31 of next year. The policy cost BAM $4,440. I. BAM reported depreclation expense of $8,750 for this year. J. Rex had prevlously operated hls business out of hls garage, but In January he decided to rent a larger space. He entered Into a lease agreement on February 1 and pald $19,680 ( $1,640 per month) to possess the space for the next 12 months (February of this year through January of next year). k. Before he opened his doors for business, Rex spent $41,250 InvestigatIng and otherwise gettIng ready to do business. He expensed $5,000 Immedlately and Is amort|zIng the remalnder using the stralght-IIne method over 180 months. I. In December, BAM agreed to a 12-month, $12,900 contract with Advertise-With-Us (AWU) to produce a radio ad campalgn. BAM pald $4,200 up front (In December of this year), and AWU agreed that BAM would owe the remalning $8,700 only If BAM's sales Increased by 15 percent over the 9 -month perlod after the contract was signed. m. In November of this year, BAM pald $2,700 In business property taxes (based on asset values) covering the perlod December 1 of this year through November 30 of next year. In November of last year, BAM pald $1,700 for business property taxes (based on asset values) covering the perlod December 1 of last year through November 30 of this year. Calculate the business taxable Income for BAM assuming that BAM elects to account for Its Inventory of minlatures. Note: Enter the write-off of the recelvable under e-1 and the sales under e-2. Negative amounts should be Indlcated by a minus sign. Do not round Intermedlate calculations. Round your final answers to the nearest whole dollar amount