80.2K

Verified Solution

Link Copied!

is this picture clear enough?

this is part 1.

questios 1 & 2

PROBLEM 2 HOH Samantha A. Cranston, age 37. is single and lives with her dependent mother at 426200 ACV a Grouse Avenue, Allentown, PA 18105. Her Sexcial Security number is 111-21-1113. otherd 1 Samantha is a licensed hairstylist. She owns and operates a salon called Tuming Heads, located at 480 Laurel Street, Allentown, PA 18105. Samantha's business activity code is 812112. In addition to 10 work stations (ie, stylist chairs) and a small reception area, the shop has display and storage areas for the products she sells (see item 2 below). During the year, Samantha leased nine of the stations to other hairstylists who are considered self-employed. The IRS sanctioned the self- employment classification for the stylists in an audit of one of Samantha's prior tax returns. Samantha collected $68,000 in rents from the stylists who leased the work stations. From her own station, Samantha eamed $14,000 (including tips of $8,000) for the styling services she provided to her own clients. Turning Heads is the local distributor for several beauty products (e.g., con ditioners, shampoos) that cannot be purchased anywhere else. Samantha buys these items from the manufacturers and sells them to regular patrons, walk-in customers, and other beauticians (including those who lease chairs from her). Turning Heads is also known for the selection and quality of its hairpieces (ie, wigs, toupees). The shop made the following sales during 2018: Hairpieces and wigs Beauty products $69,000 48.000 2. Although Samantha operates her business using the cash method of account ing, she maintains inventory accounts for the items she sells. Relevant informa- tion about the inventories (based on lower of cost or market is summarized as follows: 12/31/17 12/31/18 22100 36000 Hairpieces and wigs $10,700 $12,600 Beauty products 11,400 9,900 (22300) 22100 22506 Samantha's purchases for 2018 were $30,500 of hairpieces and wigs and 78700 56200 GS PROBLEM 2 HOH Samantha A. Cranston, age 37, is single and lives with her dependent mother at 426 4200 saya Grouse Avenue, Allentown, PA 18105. Her Social Security number is 111-21-1113. otherd- 1. Samantha is a licensed hairstylist. She owns and operates a salon called Tuming Heads, located at 480 Laurel Street, Allentown, PA 18105. Samantha's business activity code is 812112. In addition to 10 work stations (ie, stylist chairs) and a small reception area, the shop has display and storage areas for the products she sells (see item 2 below). During the year, Samantha leased nine of the stations to other hairstylists who are considered self-employed. The IRS sanctioned the self- employment classification for the stylists in an audit of one of Samantha's prior tax returns. Samantha collected $68,000 in rents from the stylists who leased the work stations. From her own station, Samantha eamed $44,000 (including tips of $8,000) for the styling services she provided to her own clients. Turning Heads is the local distributor for several beauty products (eg, con ditioners, shampoos) that cannot be purchased anywhere else. Samantha buys these items from the manufacturers and sells them to regular patrons, walk-in customers, and other beauticians (including those who lease chairs from her). Turning Heads is also known for the selection and quality of its hairpieces (ie, wigs, toupees). The shop made the following sales during 2018: Hairpieces and wigs $69,000 Beauty products 48.000 2. Although Samantha operates her business using the cash method of account ing, she maintains inventory accounts for the items she sells. Relevant informa tion about the inventories (based on lower of cost or market is summarized as follows: 12/31/17 12/31/18 22.100 3000 Hairpieces and wigs $10,700 $12.600 78700 Beauty products 11,400 9,900 (22 500) 22100 2256 200 COGS PROBLEM 2 HOH Samantha A. Cranston, age 37. is single and lives with her dependent mother at 426200 ACV a Grouse Avenue, Allentown, PA 18105. Her Sexcial Security number is 111-21-1113. otherd 1 Samantha is a licensed hairstylist. She owns and operates a salon called Tuming Heads, located at 480 Laurel Street, Allentown, PA 18105. Samantha's business activity code is 812112. In addition to 10 work stations (ie, stylist chairs) and a small reception area, the shop has display and storage areas for the products she sells (see item 2 below). During the year, Samantha leased nine of the stations to other hairstylists who are considered self-employed. The IRS sanctioned the self- employment classification for the stylists in an audit of one of Samantha's prior tax returns. Samantha collected $68,000 in rents from the stylists who leased the work stations. From her own station, Samantha eamed $14,000 (including tips of $8,000) for the styling services she provided to her own clients. Turning Heads is the local distributor for several beauty products (e.g., con ditioners, shampoos) that cannot be purchased anywhere else. Samantha buys these items from the manufacturers and sells them to regular patrons, walk-in customers, and other beauticians (including those who lease chairs from her). Turning Heads is also known for the selection and quality of its hairpieces (ie, wigs, toupees). The shop made the following sales during 2018: Hairpieces and wigs Beauty products $69,000 48.000 2. Although Samantha operates her business using the cash method of account ing, she maintains inventory accounts for the items she sells. Relevant informa- tion about the inventories (based on lower of cost or market is summarized as follows: 12/31/17 12/31/18 22100 36000 Hairpieces and wigs $10,700 $12,600 Beauty products 11,400 9,900 (22300) 22100 22506 Samantha's purchases for 2018 were $30,500 of hairpieces and wigs and 78700 56200 GS PROBLEM 2 HOH Samantha A. Cranston, age 37, is single and lives with her dependent mother at 426 4200 saya Grouse Avenue, Allentown, PA 18105. Her Social Security number is 111-21-1113. otherd- 1. Samantha is a licensed hairstylist. She owns and operates a salon called Tuming Heads, located at 480 Laurel Street, Allentown, PA 18105. Samantha's business activity code is 812112. In addition to 10 work stations (ie, stylist chairs) and a small reception area, the shop has display and storage areas for the products she sells (see item 2 below). During the year, Samantha leased nine of the stations to other hairstylists who are considered self-employed. The IRS sanctioned the self- employment classification for the stylists in an audit of one of Samantha's prior tax returns. Samantha collected $68,000 in rents from the stylists who leased the work stations. From her own station, Samantha eamed $44,000 (including tips of $8,000) for the styling services she provided to her own clients. Turning Heads is the local distributor for several beauty products (eg, con ditioners, shampoos) that cannot be purchased anywhere else. Samantha buys these items from the manufacturers and sells them to regular patrons, walk-in customers, and other beauticians (including those who lease chairs from her). Turning Heads is also known for the selection and quality of its hairpieces (ie, wigs, toupees). The shop made the following sales during 2018: Hairpieces and wigs $69,000 Beauty products 48.000 2. Although Samantha operates her business using the cash method of account ing, she maintains inventory accounts for the items she sells. Relevant informa tion about the inventories (based on lower of cost or market is summarized as follows: 12/31/17 12/31/18 22.100 3000 Hairpieces and wigs $10,700 $12.600 78700 Beauty products 11,400 9,900 (22 500) 22100 2256 200 COGS

Answer & Explanation Solved by verified expert

See Answer