Kitty Runs a Brothel (Illegal Under State Law)and Has the Following

question 12

Essay

Kitty runs a brothel (illegal under state law)and has the following items of income and expense.What is the amount that she must include in taxable income from her operation?
$\begin{array}{lr}\text { Income }&\$200,000\\\text { Expenses: }\\\text { Rent } & 8,000 \\\text { Utilities } & 2,000 \\\text { Bribes to police } & 10,000 \\\text { Medical expense } & 5,000 \\\text { Legal fees } & 20,000 \\\text { Depreciation } & 14,000 \\\text { Illegal kickbacks } & 15,000\end{array}$

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Definitions:

Dependent Variable

The outcome factor in an experiment or study, whose changes are influenced by the independent variable(s).

Independent Variable

A variable that is manipulated or controlled in an experiment to test its effect on the dependent variable.

Coefficient of Correlation

A statistical measure that calculates the strength and direction of a linear relationship between two variables on a scatterplot.

Gas Mileage

A measure of a vehicle's fuel efficiency, commonly expressed in miles per gallon (MPG) or liters per 100 kilometers (L/100km).