Betty operates a beauty salon as a sole proprietorship. Betty also owns and rents an apartment building. This year Betty had the following income and expenses. You may assume that Betty will owe $2,502 in self-employment tax on her salon income.
Interest income $11,255
Salon sales and revenue 86,360
Salaries paid to beauticians 45,250
Beauty salon supplies 23,400
Alimony paid to her ex-husband, Rocky 6,000
Rental revenue from apartment building 31,220
Depreciation on apartment building 12,900
Real estate taxes paid on apartment building 11,100
Real estate taxes paid on personal residence 6,241
Contributions to charity 4,237

You may assume that Betty will owe $2,576 in self-employment tax on her salon income, with $1,288 representing the employer portion of the self-employment tax. You may also assume that her divorce from Rocky was finalized in 2016.

Required:
Determine Betty's taxable income to file 1040.

Explanation:

Interest income - 11,255

Income from self Employment                        

Salon sales and revenue - 86,360

Beauticians salary -             45,250

Salon supplies                     23,400

Total                                    (68650)

Salon income                      17,710

Income from rental activities

Rental revenue  -                    31,220

Depreciation on building        12,900

Real estate taxes                     11,100

Total expenses                        (24,000)

Rental income                          7,220

Taxable income calculation

Interest income   - 11,255

Salon income         17,710

Rental income        7,220

Total income         36,185

Adjustment

Alimony paid      (6000)

1/2 of self employment tax on income (2502/2)  (1251)

Total                   (7251)

Adjusted income   28,934

Less standard deduction  (12,000)

Taxable income - 16,934

1   all nations face the problem of scarcity because there are limited resources and unlimited wants. nations do not have enough factors of production to produce everything that their population wants. entrepreneurial resources initiate businesses to make new goods and services; labor resources produce goods and services.

2 there are four factors of production: natural resources, labor resources, capital resources, and entrepreneurial resources. natural resources are raw materials from nature that are used to produce goods. trees, water, and grains are natural resources. some natural resources, such as wheat and cattle, are renewable

3 wants

things that you do not need to have in order to survive, but would like to have

needs

things that you must have in order to survive

goods

physical products

services

tasks that a business perform for customers

resources

items that people can use to make or obtain what they need or want

determine

to settle or decide by choice of alternatives or possiblities

4 i really dont know

answer; by looking at total product,marginal product,and changes in both after changes in inputs