Clyde Operates a Sole Proprietorship Using the Cash Method

question 72

Multiple Choice

Clyde operates a sole proprietorship using the cash method. This year Clyde made the following expenditures: $480 to U.S. Bank for 12 months of interest accruing on a business loan from September 1^st of this year through August 31^st of next year.
$600 for 12 months of property insurance beginning on July 1 of this year.
What is the maximum amount Clyde can deduct this year?

• A) $760
• B) $600
• C) $480
• D) $160
• E) $360

---

Definitions:

Mammoth Dung

Preserved feces from the extinct species of large, hairy elephants known as mammoths, often studied for scientific research on ancient environments.

Healthy Bacteria

Beneficial microorganisms that reside in the body and contribute to its normal function, particularly in the digestive system.

Intestines

The lower part of the alimentary canal from the end of the stomach to the anus, involved in digesting food and absorbing nutrients.

Brown Pelicans

A species of large water birds known for their distinctive pouches under their beaks and their spectacular diving feeding behavior.