Mike Is a Self-Employed TV Technician

question 33

Essay

Mike is a self-employed TV technician.He is usually paid as soon as he completes repairs but occasionally bills a customer with payment expected within 30 days.At the end of the year, he has $2,500 of receivables outstanding.He expects to collect $1,200 of this and write off the remainder.Mike is a cash basis taxpayer and had net earnings from his business (not including the effect of the items above) of $55,000.He also had $3,500 interest income and $200 gambling winnings, and he sold corporate stock for $7,000.The stock had been purchased in 2015 for $8,200.Mike is single and claims the standard deduction.What is his 2019 taxable income? (Ignore the self-employment tax deduction.)

---

Definitions:

Consolidation Worksheet

A document used in preparing consolidated financial statements that combines the financial data of parent and subsidiary companies.

Revalued Above Cost

When an asset's market value increases beyond its historical cost, leading to an adjustment in the book value.

Goodwill

An intangible asset that arises when a company acquires another business for more than the fair value of its identifiable net assets.