John Maylor Is a Self-Employed Plumber of John's John Service

question 14

Essay

John Maylor is a self-employed plumber of John's John Service, his sole proprietorship. In the current year, John's John Service had revenue of $120,000 and $40,000 of business expenses.
John also received $2,000 of interest income from corporate bonds.
What is John's adjusted gross income, assuming he had no other income or expenses? (ignore any deduction for self-employment tax.)

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Definitions:

Note Receivable

A financial asset representing a written promise to receive a specific amount of money from a debtor at a future date or on demand.

Bank Service Charge

Fees charged by banks for the use of their services, such as account maintenance and wire transfer fees.

Cash Short

A situation where the actual cash on hand is less than the expected amount, often detected through cash register or petty cash reconciliations.

Selling Expenses

Costs directly associated with the marketing and selling of products or services.