Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Rocky has a full-time job as an electrical engineer for the city utility. In his spare time, Rocky repairs TVs in the basement of his

Rocky has a full-time job as an electrical engineer for the city utility. In his spare time, Rocky repairs TVs in the basement of his personal residence. Most of his business comes from friends and referrals from former customers, although occasionally he runs an ad in the local suburban newspaper. Typically the TVs are dropped off at Rocky's house and later picked up by the owner when notified that the repairs have been made. The floor space of Rocky's residence is 2,500 square feet, and he estimates that 20% of this is devoted exclusively to the repair business. Gross income from the business is $12,000, and expenses (other than home office) are $5,000. Expenses relating to the residence are as follows: Real property taxes $4,500 Interest on home mortgage $8,000 Operating expenses of residence $3,000 Depreciation (based on 20% business use) $500 What is Rocky's net income from the repair business?

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Behavioural Approaches To Corporate Governance

Authors: Cameron Elliott Gordon

1st Edition

1138611395, 978-1138611399

More Books

Students also viewed these Finance questions

Question

a valuing of personal and psychological privacy;

Answered: 1 week ago