Mike Is a Self-Employed TV Technician

question 5

Essay

Mike is a self-employed TV technician.He is usually paid as soon as he completes repairs, but occasionally bills a customer with payment expected within 30 days.At the end of the year he has $2,500 of receivables outstanding.He expects to collect $1,200 of this and write off the remainder.Mike is a cash basis taxpayer and had net earnings from his business (not including the effect of the items above) of $55,000.He also had $3,500 interest income, $200 gambling winnings, and sold corporate stock for $7,000.The stock had been purchased in 2009 for $8,200.Mike is single, has no dependents, and claims the standard deduction.What is his 2012 taxable income? (Ignore the self-employment tax deduction.)

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