Polly Is a Cash Basis Taxpayer with the Following Transactions

question 48

Essay

Polly is a cash basis taxpayer with the following transactions during the year: $\begin{array}{llcc} \text { Cash received from sales of products } &\$90,000 \\ \text {Cash paid for expenses (except rent and interest) } &\$30,000\\ \text {Rent paid on a leased building for 24 months beginning December 1 } &\$54,000\\ \text {Prepaid interest on abank loan, paid on December 1 , for the next 3 months } &\$6,000\\ \text {Four months' rent received on a leased building, on October 1 } &\$8,000\\\end{array}$
Calculate Polly's income from her business for this calendar year.

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Definitions:

External Service Provider

An outside company or individual that offers a specific service to an organization, often in areas where the organization lacks expertise or resources.

Compensation Costs

The total expenses incurred by an employer to provide wages, salaries, and benefits to employees.

Budgeted Costs

The estimated financial expenditure allocated for specific purposes during a predetermined timeframe.

Net Profit

The amount of money that remains from revenues after all operating expenses, taxes, and costs have been subtracted.