Alexandra Operates a Garage as a Sole Proprietorship

question 49

Essay

Alexandra operates a garage as a sole proprietorship.Alexandra also owns a half interest in a partnership that operates a gas station.This year Alexandra paid or reported the following expenses related to her garage and other property.Determine Alexandra's AGI for 2017.
$$\begin{array} { l r } \text { Reverue frorn auto repairs } & \$ 143,930 \\\text { Salaries paid to rnecharnics } & 72,210 \\\text { Supplies and tools } & 18,500 \\\text { Reverues from gas station partrership (Alexardra's share) } & 125,000 \\\text { Experses from gas station patruership (Alexardra's share) } & 95,200 \\\text { Belf-ermploymert tax (1/2 is ermployer's share) } & 12,702\end{array}$$

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Definitions:

Factory Overhead

Costs incurred during the manufacturing process that are not directly tied to the product, including utilities, depreciation of equipment, and salaries of maintenance staff.

Equivalent Units

A calculation used in cost accounting to express the amount of work done on partially finished goods in terms of fully completed units.

First-In, First-Out

An inventory valuation method that assumes goods are sold in the order they are acquired, with the cost of the oldest products being used to calculate cost of goods sold first.

Conversion

The process of changing assets, investments, or data from one form to another, often referring to the conversion of currencies or converting raw materials into finished goods.