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Problem 3-1 (Algorithmic) Schedule C (LO 3.1, 3.3, 3.5, 3.7)

Scott Butterfield is self-employed as a CPA. He uses the cash method of accounting, and his Social Security number is 644-47-7833. His principal business code is 541211. Scott's CPA practice is located at 678 Third Street, Riverside, CA 92860. Scott's income statement for the year shows the following:

Income Statement
Scott Butterfield, CPA Income Statement 12/31/2020
	Current Period			Prior Period
	1/1/2020 to 12/31/2020			1/1/2019 to 12/31/2019
REVENUES
Tax Services	$283,600			$72,154
Accounting Services	28,360			50,256
Other Consulting Services	62,392			7,690
TOTAL REVENUES	374,352			130,100
COST OF SERVICES
Salaries	56,720			29,400
Payroll Taxes	2,387			2,275
Supplies	300			1,225
TOTAL COST OF SERVICES	59,407			32,900
GROSS PROFIT (LOSS)	314,945			97,200
OPERATING EXPENSES
Advertising and Promotion	2,000
Business Licenses and Permits	620			250
Charitable Contributions	450			250
Continuing Education	1,500
Dues and Subscriptions	1,640			3,500
Insurance	17,016			870
Meals and Entertainment	12,762			5,400
Office Expense	5,672
Postage and Delivery	85
Printing and Reproduction	2,836
Office Rent	8,508			13,800
Travel	11,344			750
Utilities	3,403			2,724
TOTAL OPERATING EXPENSES	67,786			27,544
NET INCOME (LOSS)	$247,159			$69,656

Scott also mentioned the following:

• The expenses for dues and subscriptions were his country club membership dues for the year.
• Of the charitable contributions, $50 were made to a political action committee.
• Scott does not generate income from the sale of goods and therefore does not record supplies and wages as part of cost of goods sold.
• Scott placed a business auto in service on January 1, 2017 and drove it 6,904 miles for business, 4,142 miles for commuting, and 8,285 miles for nonbusiness purposes. His wife has a car for personal use.

Complete Schedule C for Scott showing Scott's net taxable profit from self-employment. Assume Scott has evidence to support his deductions. If required, only use the minus sign to indicate a net loss. When required, round amounts to the nearest dollar.

E

How much are the taxes and fees? Please explain.

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