The Business Is a Proprietorship Owned by T $\quad$ $\$ 100,000$

question 26

Multiple Choice

The business is a proprietorship owned by T.T is single and has no other tax information. Income from services $\quad$$\$ 100,000$
Net capital loss $\quad$ 2,200
Guaranteed compensation paid to $\mathrm { T } \quad 10,000$
Life insurance premium for $\mathrm { T }$ ,
payable to T's children $\quad$ 300
Other operating expenses $\quad 54,000$ Ignoring self-employment taxes, T's A.G.I, is

• A)$33,500
• B)$33,800
• C)$36,000
• D)$43,800

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Definitions:

Sell

The act of giving or handing over something in exchange for money.

Contribution Margin

The difference between sales revenue and variable costs, indicating how much revenue contributes to covering fixed costs and generating profit.

Relevant Range

The range of activity within which the assumptions about fixed and variable cost behaviors are valid.

Sunk Cost

A past cost that has already been incurred and cannot be recovered, which should not influence future financial or business decisions.