Question

Geraldine is an accrual basis taxpayer who has the following transactions during the current calendar tax year: Accrued business income (except rent) $220,000 Accrued business expenses (except rent) 170,000 Rental income on a building leased for the next 6 months, received on December 1 21,000 Prepaid rent expense for 6 months, paid on December 1 9,000 Calculate Geraldine's net income from her business for the current year.

Answer 1

Total: $69,500

Explanation:

Income:

Other than rental: 220,000

Rental: 21,000

Expenses:

Other than rental: (170,000)

Rental (9,000/6): (1,500)

Total: $69,500