David Purchased a Deli Shop on February 1ˢᵗ of Last

question 75

Essay

David purchased a deli shop on February 1ˢᵗ of last year and began to operate it as a sole proprietorship.David reports his personal taxes using the cash method over a calendar year,and he wants to use the cash method and fiscal year for his sole proprietorship.He has summarized his receipts and expenses through January 31ˢᵗ of this year as follows:
$$\begin{array} { l r r } & \text { Receipts } & \text { Expenses } \\\text { February thri. Decermber lastyear } & \$ 112,000 & \$ 84,500 \\\text { Jarnury this year } & 10,400 & 6,200\end{array}$$ What income should David report from his sole proprietorship?

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Definitions:

Lease Termination

The act of ending a lease agreement before its specified closing date, by either the landlord or tenant, under terms specified in the agreement.

Wet Floor

A surface where liquids have been spilled or cleaned, representing a slip hazard and commonly marked by warning signs to prevent accidents.

Lease Termination

The process or act of ending a lease agreement before its agreed-upon expiration date, either through mutual agreement, breaching the contract, or statutory provisions.

Joint Tenancy

A form of property ownership where two or more individuals hold equal rights over the entire property, and upon the death of one, the surviving tenant(s) receive the deceased's share by right of survivorship.