Bryan followed in his father’s footsteps and entered into thecarpet business. He owns and operates I Do Carpet (IDC). Bryanprefers to install carpet only, but in order to earn additionalrevenue, he also cleans carpets and sells carpet-cleaning supplies.IDC contracted with a homebuilder in December of last year toinstall carpet in 10 new homes being built. The contract price of$92,000 includes $54,800 for materials (carpet). The remaining$37,200 is for IDC’s service of installing the carpet. The contractalso stated that all money was to be paid up front. The homebuilderpaid IDC in full on December 28 of last year. The contract requiredIDC to complete the work by January 31 of this year. Bryanpurchased the necessary carpet on January 2 and began working onthe first home January 4. He completed the last home on January 27of this year. IDC entered into several other contracts this yearand completed the work before year-end. The work cost $178,000 inmaterials. Bryan billed out $244,800 but only collected $220,000 byyear-end. Of the $24,800 still owed to him, Bryan wrote off $4,200he didn’t expect to collect as a bad debt from a customerexperiencing extreme financial difficulties. IDC entered into athree-year contract to clean the carpets of an office building. Thecontract specified that IDC would clean the carpets monthly fromJuly 1 of this year through June 30 three years hence. IDC receivedpayment in full of $9,504 ($264 a month for 36 months) on June 30of this year. IDC sold 100 bottles of carpet stain remover thisyear for $5 per bottle (it collected $500). IDC sold 40 bottles onJune 1 and 60 bottles on November 2. IDC had the followingcarpet-cleaning supplies on hand for this year and it uses the LIFOmethod of accounting for inventory under a perpetual inventorysystem: Purchase Date Bottles Total Cost November last year 40 $312February this year 35 208 July this year 25 205 August this year 40380 Totals 140 $1,105 On August 1 of this year, IDC needed moreroom for storage and paid $2,340 to rent a garage for 12 months. OnNovember 30 of this year, Bryan decided it was time to get his logoon the sides of his work van. IDC hired We Paint Anything Inc.(WPA) to do the job. It paid $980 down and agreed to pay theremaining $2,940 upon completion of the job. WPA indicated itwouldn’t be able to begin the job until January 15 of next year,but the job would only take one week to complete. Due tocircumstances beyond its control, WPA wasn’t able to complete thejob until April 1 of next year, at which time IDC paid theremaining $2,940. In December, Bryan’s son, Aiden, helped himfinish some carpeting jobs. IDC owed Aiden $1,080 (reasonable)compensation for his work. However, Aiden did not receive thepayment until January of next year. IDC also paid $5,800 forinterest on a short-term bank loan relating to the period fromNovember 1 of this year through March 31 of next year. Compute histaxable income for the current year considering the followingitems: (Negative amounts should be indicated by a minus sign. Enterzero for no effect on taxable income. Do not round intermediatecalculations.