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Smith operates a roof repair business. This year smith's business generated cash receipts of $32,000 and Smith made the following expenditures associated with his business:

Advertising $500
Car and truck expense $1360
Depreciation $3200
Employee compensation $5000
Education $1000

The education expense was for a 2 week nighttime course in business management. Smith believes the expenditure should qualify as an ordinary and necessary business expense. What net income should Smith report from his business? Smith is on the cash method and calendar year.

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Accounting Basics, Accounting

Category:- Accounting Basics
Reference No.:- M9415508

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