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Things to remember: 1. The amount for utilities includes the personal residence and business. You may need to adjust this number. 2. Meals and Entertainment expenses always have an automatic 50% disallowance. 3. Landscaping expense includes the personal residence and the business. You may need to adjust this number. 4. You need to determine what expenses are actually capital assets. Do not include these in your expenses in Part 1 or 2. List these items under the capital assets section that starts on Line 28 of this spreadsheet. There are 3 capital assets. 5. For part 2, Hobby Income/Deductions, you will use the same list of income and expenses as in part 1. You have to assign a Deduction Tier to each expense. Remember, hobby expenses may not exceed income. Hobbies do not report a loss. You need to tell me which expenses will be used to offset the hobby income. You may not have to use all the expenses. 6. The work on Part 1 of this project will be what you input onto the Schedule C for Westchester Wood when you do the final course project. The amount you have now on Line 13 of the Brock's 1040 will change to the amount you calculate this week plus one more entry that you have to do when we move Pamela's miscellaneous income of $1,500 to a Schedule C in a later module. The Brocks will have a loss on the Westchester Wood (HINT).