Rich is a cash-basis self-employed air-conditioning repairman with current year gross business receipts of $20,000. Rich's cash disbursements were as follows:
- Air conditioning parts: $2,500
- Yellow Pages listing : $2,000
- Estimated federal income taxes on self-employment income: $1,000
- Business long-distance telephone calls: $400
- Charitable contributions: $200
What amount should Rich report as net self-employment income?
a. $15,100
b. $14,900
c. $14,100
d. $13,900
Answer: A
CPA Exam
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