Terry and Jim are both involved in operating illegal businesses. Terry operates a gambling business and Jim operates a drug-running business. Both businesses have gross revenues of $500,000. The businesses incur the following expenses. Terry Jim Employee salaries $200,000 $200,000 Bribes to police 25,000 25,000 Rent and utilities 50,000 50,000 Cost of goods sold - 0 - 125,000 Which of the following statements is correct?
(a) Neither Terry nor Jim can deduct any of these items in calculating the business profit.
(b) Jim should report profit from his business of $500,000.
(c) Terry should report profit from his business of $250,000. (d) Jim should report profit from his business of $250,000. (e) None of these choices are correct.
Answers (1)
Know the Answer?
Not Sure About the Answer?
Find an answer to your question ✅ “Terry and Jim are both involved in operating illegal businesses. Terry operates a gambling business and Jim operates a drug-running ...” in 📘 Business if you're in doubt about the correctness of the answers or there's no answer, then try to use the smart search and find answers to the similar questions.
Search for Other Answers
You Might be Interested in
Jasper Company provided the following information for last year: Costs Amount Sales in units 285,000 Selling price $17 Direct materials $143,000 Direct labor $503,000 Manufacturing overhead $110,000 Selling expense $439,000 Administrative expense
Answers (1)
Sugar Cookies will pay an annual dividend of $1.23 a share next year. The firm expects to increase this dividend by 8 percent per year the following four years and then decrease the dividend growth to 2 percent annually thereafter.
Answers (1)
The Coase Theorem suggests that private markets may not be able to solve the problem of externalitiesa. if the government does not become involved in the process. b.
Answers (1)
After submitting a résumé electronically, how long should you wait before following up with an employer? a. 1-2 days b. 1-2 weeks c. 2-3 days d. 4-5 days
Answers (1)
Sonia goes to have her hair trimmed and agrees to pay $40 to the stylist. while there, sonia decides that she would also like highlights. the stylist informs her that highlights will cost an additional $30.
Answers (1)
New Questions in Business
Lori contracts to buy coffee beans for her store from Mike. The contract price is $7.50 per pound of Costa Rican coffee. Mike breaches the contract and delivers no coffee. Lori's damages will likely be
Answers (1)
Using the services of financial institutions or financial specialists (such as insurance agents, certified financial planners or investment advisers) to seek relevant information is done in which step in the financial planning process
Answers (1)
Gregg Company supplies schools with floor mattresses to use in physical education classes. Gregg has received a special order from a large school district to buy 600 mats at $45 each.
Answers (1)
Dove, Inc., had additions to retained earnings for the year just ended of $635,000. The firm paid out $80,000 in cash dividends, and it has ending total equity of $7.30 million.
Answers (1)
Which of the following strategies should a company NOT adopt if it wants to win a format war? a. Joining forces with other companies to develop new technologies b. Charging extremely high license fee for the technology c.
Answers (1)