Reference no: EM133042778
Question - In order to supplement his income working in a craft store, Mr. John Collins has decided to start a home-based business that will specialize in selling used vintage records. Mr. Collins has always been passionate about music.
The business will be run out of space that he has set aside in his residence. This space involves 25 percent of the total floor space in the residence.
The residence was acquired on January 1, 2017 at a total cost of $345,000. It is estimated that $95,000 of this total value can be attributed to the land on which the residence is situated. For the year ending December 31, 2018, Mr. Collins has the following costs that can be associated with this residence:
Utilities for Home (Heat, Light, And Water) $2580
Mortgage Interest Paid $8410
House Insurance $600
Property Taxes $3800
Repairs and Maintenance for Home $3100
Total $18,490
The business begins operations on March 1, 2018. On that date, Mr. Collins acquires the following assets to be used in his new business:
Office Furniture and Storage Racks $12,000
Computer $1650
Accounting Software $750
In addition, he has a separate telephone line installed for dealing exclusively with the mail order business. The telephone charge includes charges for a toll-free number and a long-distance package.
During the period March 1, 2018 through December 31, 2018, his mail order sales total $118,000. Costs associated with these sales are as follows:
Cost of Merchandise Sold $64,000
Unsold Merchandise (Lower of Cost and Market) $11,500
Packaging Materials $3600
Shipping Costs $5800
Miscellaneous Office Supplies $660
Telephone (Total Charge for The Period) $1350
Printing of Posters and Brochures Distributed $680
Required -
1. Can Mr. Collins deduct workspace in the home costs? Briefly explain your conclusion.
2. Compute the minimum net business income or loss that Mr. Collins must report in his 2018 personal income tax return.
|
Improve the antivirus software
: what do you think it could be better to improve the antivirus software? what other precautions do you use to prevent virus, malware, etc.?
|
|
Protections from the security software
: The protections from the security software must continue when the device is taken off the network, such as when it is off-grid,
|
|
Determine the annual cost of depreciation
: MEGAWIDE purchased a machine for precast casting for P7,500,000 used it for 15 years and then sold it for P2,810,000. Determine the annual cost of depreciation
|
|
What the total selling expenses for the month of February
: For February, sales revenue is $637,000, sales commissions are 6% of sales, the sales manager's salary is $90,000, What the total selling expenses for the month
|
|
Compute the minimum net business income or loss
: Mortgage Interest Paid $8410. Compute the minimum net business income or loss that Mr. Collins must report in his 2018 personal income tax return
|
|
Environment for government and business
: The current environment for government and business is one of constant change. This environment requires leaders, managers, and employees be trained for the fut
|
|
Historical collective agreement negotiations
: A lot has been learned from historical collective agreement negotiations. Researchers have shown there are significant differences that distinguish expert from
|
|
Discuss the financial benefits of chatbots
: Discuss the financial benefits of chatbots. Research the role of chatbots in helping patients with dementia
|
|
High-level summary of the management report
: You are to complete a 10-minute presentation which documents the results of your research above and presents it in a logical manner for the franchise owner.
|