Thomas owns a business in which he rents warehouse space to customers. The business is a sole proprietorship and is called Thomas Storage. (Catchy isnt)? The company does not own any real estate. It rents an office, warehouse and all equipment to provide these services. The company uses the cash basis of accounting to record transactions and determine taxable income.

The company collected $140,000 of rental income in cash throughout the year. Included in the $140,000 is $3,000 cash for rental services that Thomas Storage will provide for a customer during January and February of next year.

The company paid cash for advertising in their local paper, the Local Gazette. They paid a total of $1,333 for advertising in the current tax year for the entire year.

Thomas does all the office work. The office space is rented for $7,888 for the year. All of this was paid during the tax year and is for the tax year. Also the following were paid in cash during the tax year for the office space

Electricity	$891
Water	$300
Gas (heat)	$766
Sewer and Trash	$200
Cleaning service	$529
Insurance	$898
Phone/Internet	$567

Note: The insurance coverage is from February 1 of current tax year to February 1 of next tax year.

Thomas is responsible for all the office work and attaining clients. During the tax year Thomas purchased the following gifts for clients to show his appreciation for their business:

Pens (with company info)	$201
Television (Mr. Smith)	$532
Fruit Basket (Mrs Jones)	$56
Clock (Mr Lamp)	$80
Shipping and wrapping	$15

Thomas must use the company vehicles to run various business errands including meeting with customers.

The following information is for the vehicles that were used at the business during the tax year:

	Vehicle 1	Vehicle 2
Total Mileage	15,705	13,010
Business Mileage	15,705	6,302
Personal mileage	0	6,708
Gas	$1,470	$1,356
Oil	450	300
Insurance	731	731
Registration	50	50
Speeding Tickets	199	0
Parking Tickets	0	50
Parking Fees (All business)	555	233
Tolls (All business)	475	365

During the year Thomas needed to travel to Las Vegas for a landlord conference. The company paid all his expenses. He spent 3 days at the conference and 2 days playing craps at the casino. The expenses of the trip were as follows:

Airfare	$2,000
Hotel (per night)	200
Total Cab Fare to/from conference	100
Meals daily	110
Limo to go play craps	300
Registration fee for conference	600

The office supplies inventory at the company for the year was as follows:

Beginning of year	$321
Purchases during year	$735
End of year	$472
Used	$584

Thomas is very active in his local political party. During the year the business donated $300 to a local political candidate.

The business has one employee, Jadee, who take care of the warehouse. Jadees salary for the year is $50,000 and is all paid by December 31 of the current tax year. In addition the company must pay the following for employing Jadee(also fully paid by December 31 of the current tax year):

FICA and Medicare Tax (Employer Match)	$3,825
Employer unemployment taxes	210
Workmans compensation insurance	761
Employee health insurance premiums	8,008

Thomas also went on a trip to learn more about the management of a warehouse. He flew to Houston Texas for a 2 day conference called : Managing a Warehouse. Unfortunately, he was only able to attend the conference while there and not see any of the sights Houston has to offer. The expenses that the company paid for this trip were as follows:

Airfare:	$1,444
Hotel per night:	150
Meals per day	125

In addition the company paid in cash during the tax year the following for the warehouse:

Rent	$15,500
Cleaning	$1,645
Electricity	$3,787
Water	$ 455
Gas (Heat)	$7,989
Sewer/ Trash	$3,078
Phone/ Internet	$ 567
Insurance	$2,899

Note: The insurance coverage is from February 1 of current tax year to February 1 of next tax year.

The final expenses that the company paid by December 31 of the current tax year were as follows:

Accountant for preparation of tax return	$2,190
Lawyer for Thomass Divorce	$4,700
Interest charge on Business Line of Credit	$6,439

Requirement:

Complete the schedule C and Schedule SE for Thomas Storage for the current tax year (2016) . Include all calculations and assumptions made during the preparation of the tax return. (Tax law is not required)