Westchester
knohe_The Brock's business, Westchester Wood, has the following income and expenses.
Income: | |
Receipts from sales of unfinished furniture | $65,000 |
Receipts from services to stain/paint furniture | 12,000 |
Receipts from sales of paint and stain products | 1,000 |
Expenditures: | |
Cost of furniture | $38,000 |
Cost of stains and paints | 2,500 |
Depreciation expense on building | 7,000 |
Advertising | 1,200 |
Auto expenses (delivering furniture) | 900 |
Loading dock (new) | 22,000 |
Utilities | 6,000 |
Insurance | 3,500 |
Labor (to stain/paint furniture) | 9,800 |
Property taxes | 5,000 |
Delivery truck (used truck) | 9,500 |
Bank fees | 2,000 |
Telephone | 2,500 |
Computer | 1,300 |
Meals and entertainment | 1,800 |
Accounting | 6,000 |
Landscaping | 2,400 |
Maintenance | 1,200 |
The amount for landscaping includes $800 for maintaining the Brock's personal residence. The utilities include $2,000 of oil that was delivered to the Brock's home.
- Assume Westchester Wood is a business:
- identify which expenditures are ordinary, necessary and reasonable,
- whether the expenditures should capitalized or expensed, and
- calculate net income or loss.
- Assume that Westchester Wood is a hobby:
- identify expenditures (ignore any that would be capitalized) that are allowed and to what extent and
- identify which expenditures are Tier 1, Tier 2 or Tier 3 expenses.
Use excel
10 years ago
5
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westchester.xlsx
