Clyde Operates a Sole Proprietorship Using the Cash Method

question 47

Multiple Choice

Clyde operates a sole proprietorship using the cash method. This year Clyde made the following expenditures:
$480 to U.S. Bank for 12 months of interest accruing on a business loan from September 1ˢᵗ of this year through August 31ˢᵗ of next year.
$600 for 12 months of property insurance beginning on July 1 of this year.
What is the maximum amount Clyde can deduct this year?

• A) $760
• B) $600
• C) $480
• D) $160
• E) $360

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Definitions:

Epidermis

The outermost layer of skin that provides a waterproof barrier and creates our skin tone.

Psoriasis

A chronic skin condition characterized by red patches covered with silver-white scales.

Protein Substance

A type of biological molecule composed of one or more chains of amino acids, critical for the structure, function, and regulation of the body's tissues and organs.

Scar

The fibrous tissue that replaces normal skin after an injury or surgical incision as part of the healing process.