Question - John Mason operates a consulting business, Mason Enterprises, as a sole proprietorship. He had to transfer $100,000 of stocks and securities into Mason Enterprises's name to show financial viability for the business. During the current year, the business had the following income and expenses from operations:
Consulting revenue 125,000
Travel expenses 40,000
Transportation 3,000
Advertising 7,000
Office expense 3,000
Telephone 1,000
Dividend income 5,000
Interest income 2,000
Charitable contribution 1,000
Political contribution 6,000
Requirements
a) Determine the Schedule C net income. How are items not included in the Schedule C net income reported?
b) Refer to the information in the preceding problem, except that John and his wife Mary are equal partners in Mason Enterprises, which operates as a partnership. How would they report the income and loss items from partnership operations?
c) Refer to the information in the problem, except that John operates Mason Enterprises as an S corporation. How would John report the income and loss items from S corporation operations?