Question - on january 12016 peggy age 27 amp single opened, Ask an Expert

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Question - On January 1,2016 Peggy (age 27 & single) opened her own tax consulting firm. In the current year she had the following income & expenses

Collected cash consulting fees 1,500,000

Had outstanding AR at 12/31/16 of 130,000

Had outstanding AR at 12/31/17 of 100,000

Paid salarys 850,000

Paid medical insurance for staff of 22,000

Paid medical insurance for herself 8,000

She bought a Jaguar & intended to deduct it as a business expenses (90% business) 250,000

Operating costs 49,000

Business parking 4,200

Toll vioations 1,000

Purchased reception furniture in October 2017 420,000

Purchased computers in February 2017 35,000

Interest income 12,000

Interest income - CA Muni 2,000

Peggy made CA estimate payments of 12,000

Investment management fees 4,000

Required -

A. What was her net business income?

B. What was her AGI?

C. What was her taxable income?

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Accounting Basics, Accounting

Category:- Accounting Basics
Reference No.:- M93106885

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