Julie's Sole Proprietorship Consists of a Bakery and Retail Food

question 14

Multiple Choice

Julie's sole proprietorship consists of a bakery and retail food sales.The bakery's DPGR is $700,000,but after CGS,direct expenses,and a ratable portion of indirect expenses are deducted,QPAI is $100,000.W-2 wages related to DPGR are significant.The retail food sales have a loss of $1 million.If Julie files a joint return and her modified AGI is $119,500,what is her allowable DPAD,if any,for 2010?

• A)None.
• B)$6,000.
• C)$9,000.
• D)$10,755.
• E)Some other amount.

---

Definitions:

Cross Elasticity

An indicator of the sensitivity in demand for a certain product in response to price fluctuations of a different product.

Percentage Change

A mathematical calculation that shows how much a number has increased or decreased compared to its previous value, expressed as a percentage.

Complementary Goods

Goods and services that are used together; when the price of one falls, the demand for the other rises (and conversely).

Inelastic

A term describing demand when it changes by a smaller percentage than changes in price.