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16 February, 20:23

The following information pertains to Simon, a cash basis sole proprietor, for the current tax year: Gross receipts from business $120,000 Dividend income from personal investments 800 Cost of goods sold 60,000 Other business operating expenses 12,000 State business taxes 1,200 Federal self-employment tax 6,613 What is Simon's net income from his sole proprietorship on his California return

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  1. 16 February, 21:02
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    Net Income = $46,800

    Explanation:

    Given:

    Gross income = $120,000

    Personal Dividend Income = $800

    Cost of goods sold = $60,000

    Operating expenses = $12,000

    State business taxes = $1,200

    Federal self-employment tax = $6,613

    Computation of net income:

    Particular Amount

    Gross income $120,000

    Less: Cost of goods sold $60,000

    Less: Operating expenses $12,000

    Less: State business taxes $1,200

    Net income $46,800

    Note: other are not included in net income.
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