Red Company Is a Proprietorship Owned by Sally,a Single Individual

question 69

Essay

Red Company is a proprietorship owned by Sally,a single individual.Red manufactures and sells widgets.An examination of Red's records shows the following items for the current year:
Domestic production gross receipts
$2,500,000
Cost of goods sold for domestic products
600,000
Expenses directly related to domestic production gross
receipts (other than wages)
​
280,000
Ratable portion of other expenses
100,000
Other expenses not allocated to domestic production gross receipts
30,000
W-2 wages paid to employees engaged in qualified domestic
production activities
​
270,000
Total W-2 wages
320,000
Sally also had the following additional items:
Dividends received
$ 20,000
Interest income
10,000
​
Determine Sally's domestic production activities deduction for the current year.

---

Definitions:

Washington Consensus

represents a set of neoliberal economic policies that emphasize fiscal discipline, deregulation, trade liberalization, and privatization.

Tariffs

Taxes imposed by a government on imported or exported goods to regulate trade, protect domestic industries, or generate revenue.

Privatization

The process of transferring ownership or operation of a business, enterprise, agency, or public service from the public sector (government) to private individuals or organizations.

Globalization

The process of interaction and integration among people, companies, and governments worldwide, resulting in the interconnectedness of global economies, cultures, and populations.