Reference no: EM132595713
Question - Murray owns a company, Goldberg's Furniture Store, and works there full time. The business uses the cash method for tax purposes and the cost method for inventory. Beginning inventory is $127,000, inventory purchases were $118,000, and ending inventory is $120,000. During the year, Murray takes 2 business trips to buy furniture at the market. The information on Murray's business is listed below:
Murray's Business Information
Sales: $306,700
Employee's wages: 95,000
Advertising: 1,000
Payroll taxes: 7,628
Office supplies: 525
Taxi fare on business trips: 280
Airfare for business trips: 1,625
Lodging on business trips: 1,150
Business meals: 595
Business-related postage: 280
Copying: 197
Legal fees: 420
On January 2, 2018, Murray purchases a new car to use in his business.The car, a Lexuster, costs $54,700. He drives the car 7,500 miles for business and drives a total of 5,000 miles during 2019 for personal purposes and commuting. The total expenses for the automobile are: repairs and maintenance, $860; tires, $900; insurance, $1,800; depreciation, $6,564; and gasoline, $1,855. Interest on the Goldberg's auto loan was $585. Murray has records for the mileage driven.
What is the business income or (loss) for Goldberg's Furniture Store? Please use reasonable assumptions if information needed is not available.