Question

1) The image shows a completed schedule C using the cash method. Complete schedule C using...

SCHEDULE C (Form 1040) Profit or Loss From Business (Sole Proprietorship) •Go to www.irs.gov/Schedulec for instructions and t

Depreciation and section 179 expense included in Part II) (see instructions). 13 Supplies (not included in Part I) 22 22 12,8

Description Example Cash Accrual Income Service revenue: $ 78,000 9-27 Landscaping revenue $78,000 December landscape serviceWages and subcontractor fees: Part-time employees Full-time employee (Ken) Fountain removal (part-time employee) 23,000 23,00

1) The image shows a completed schedule C using the cash method. Complete schedule C using the ACCRUAL method.

2) Are there any differences between the 2018 and 2019 forms?

SCHEDULE G Farm 1040 or 1040-SR) Profit or Loss From Business Sole Proprietanhip 2019 Go to www.ipowSchedulec for instructionPage 2 SweFam t Part II Cost of Goods Sold a00 insructions) Method uned to O Loveer ot cont or markat eD oter tach plaration)

SCHEDULE C (Form 1040) Profit or Loss From Business (Sole Proprietorship) •Go to www.irs.gov/Schedulec for instructions and the latest information. OMB No. 1545-0074 2018 Department of the Treasury Internal Revenue Service (99) Name of proprietor RICK GRIME Attachment Attach to Form 1040, 1040NR, or 1041; partnerships generally must file Form 1065. Sequence No. 09 Social security number (SSN) 000-00-0000 B Enter code from instructions | 5 | 7 | 1|6|3|0 D Employer ID number (EIN) (see instr.) 0|oio|0|0|0|o| 0|0 Principal business or profession, including product or service (see instructions) LANDSCAPING Business name. If no separate business name, leave blank. GREEN ACRES LANDSCAPING Business address (including suite or room no.) > BUCKSNORT STREET SAN ANTONIO, TX 78208 City, town or post office, state, and ZIP code IF (2) DAccrual (3) Dother (specify) Accounting method: (1) Cash Did you "materially participate" in the operation of this business during 2018? If "No," see instructions for limit on losses Yes No If you started or acquired this business during 2018, check here Yes V No Did you make any payments in 2018 that would require you to file Form(s) 1099? (see instructions) If "Yes," did you or will you file required Forms 1099? Part I Income Yes No Gross receipts or sales. See instructions for line 1 and check the box if this income was reported to you on Form W-2 and the "Statutory employee" box on that form was checked. 99,200 2 Returns and allowances 2 3 Subtract line 2 from line 1 99,200 4 Cost of goods sold (from line 42) 4 Gross profit. Subtract line 4 from line 3 99,200 Other income, including federal and state gasoline or fuel tax credit or refund (see instructions) 6 Gross income. Add lines 5 and 6 99,200 Part II Expenses. Enter expenses for business use of your home only on line 30. 1,500 Advertising . 1,160 18 Office expense (see instructions) 18 Car and truck expenses (see Pension and profit-sharing plans 19 19 instructions). 20 Rent or lease (see instructions): 5,641 10 Commissions and fees 10 Vehicles, machinery, and equipment 20a 7,400 a b Other business property 11 Contract labor (see instructions) 11 1,000 20b 1,975 12,800 12 Depletion Depreciation and section 179 12 21 Repairs and maintenance 21 13 22 Supplies (not included in Part I) 22 deduction (not expense included in Part II) (see instructions). Taxes and licenses 23 23 400 13 4,000 24 Travel and meals:
Depreciation and section 179 expense included in Part II) (see instructions). 13 Supplies (not included in Part I) 22 22 12,800 deduction (not Taxes and licenses. 23 23 400 13 24 Travel and meals: 4,000 1,435 Employee benefit programs Travel. 24a 14 (other than on line 19). 14 Deductible meals (see 1,200 15 Insurance (other than health) 15 instructions) 24b 270 Interest (see instructions): 25 Utilities 16 25 2,200 53,850 300 Mortgage (paid to banks, etc.) 16a 26 Wages (less employment credits) 26 a Other 16b 27a Other expenses (from line 48) . 27a 850 1,040 17 Legal and professional services 17 Reserved for future use 27b 28 Total expenses before expenses for business use of home. Add lines 8 through 27a 28 97,021 2,179 29 Tentative profit or (loss). Subtract line 28 from line 7. 29 30 Expenses for business use of your home. Do not report these expenses elsewhere. Attach Form 8829 unless using the simplified method (see instructions). Simplified method filers only: enter the total square footage of: (a) your home: and (b) the part of your home used for business: Use the Simplified Method Worksheet in the instructions to figure the amount to enter on line 30 30 31 Net profit or (loss). Subtract line 30 from line 29. • If a profit, enter on both Schedule 1 (Form 1040), line 12 (or Form 1040NR, line 13) and on Schedule SE, 2,179 line 2. (If you checked the box on line 1, see instructions). Estates and trusts, enter on Form 1041, line 3. 31 • If a loss, you must go to line 32. 32 If you have a loss, check the box that describes your investment in this activity (see instructions). • If you checked 32a, enter the loss on both Schedule 1 (Form 1040), line 12 (or Form 1040NR, line 13) and on Schedule SE, line 2. (If you checked the box on line 1, see the line 31 instructions). All investment is at risk. 32a Some investment is not 32b Estates and trusts, enter on Form 1041, line 3. at risk. • If you checked 32b, you must attach Form 6198. Your loss may be limited. For Paperwork Reduction Act Notice, see the separate instructions. Cat. No. 11334P Schedule C (Form 1040) 2018
Description Example Cash Accrual Income Service revenue: $ 78,000 9-27 Landscaping revenue $78,000 December landscape service 11,000 9-15 Prepaid landscape services 7,200 300 9-16 Sales of inventory: Tree sales 14,000 14,000 9-18 $99,200 $103,300 Gross Profit $ 12,800 Nonincidental materials and supplies $12,800 9-18 Car and truck expense: SUV operating expense BMW operating expense 5,335 5,335 9-7 306 306 9-9 Insurance 1,200 1,200 9-14 Rent: 9-21 Shop 7,200 4,800 Trailer 200 200 9-22 Travel and business meals: Travel to NY seminar 1,435 1,435 9-8 Business dinner with clients 270 270 9-6 Wages and subcontractor fees: Part-time employees Full-time employee (Ken) 23,000 23,000 9-2 30,000 30,000 9-17
Wages and subcontractor fees: Part-time employees Full-time employee (Ken) Fountain removal (part-time employee) 23,000 23,000 9-2 30,000 9-17 30,000 850 850 9-23 Fence installation (prepaid subcontractor) 1,000 9-20 Other expenses: Books for waiting room 50 50 9-1 Education-seminar 300 300 9-8 Uniforms 500 500 9-5 Bad debts 280 9-25 Other expenses (not in examples): Advertising 1,160 1,160 Depreciation 4,000 4,000 Interest 300 300 Legal and professional services Office expense 1,040 1,040 1,500 1,500 Repairs and maintenance 1,975 1,975 Taxes and licenses 400 400 Utilities 2,200 2,200 $ 93,901 $97,021 Total deductions $ 2,179 Net Business Income 9,399
SCHEDULE G Farm 1040 or 1040-SR) Profit or Loss From Business Sole Proprietanhip 2019 Go to www.ipowSchedulec for instructions and the latust information Deatnute y nice or 1041; partneruhips generally must fe Form 100s Attach to Farm 1040, 1040-SR, 1040-NR, S ce 00 Socia ity me Nane t proprator Derode om ination Principal buine or profeion, including product or enice ee intructiona nploya eN Dunina nama If no mparate buine nama, ave biark. Buine addr nciuding eoron ne City, town or post ofice state and P od A DAconal A Doher apecity Accounting mathad inatructiona tor limt on lo Yea ONo Did you "materially paricipate" in the operation of thia buines during 20197Na" If you tarted or aoquired thia business during 2019, check hem Yes No Did you make any payments in 2019 tat would require you to fie Farm 10aa7 jne instructiona. If "Yas" did you ar wil you fe Income d Fora 07 Parti ncome Grou ecaipts or al Sen inatractiona for line 1d check he bax h income wan mported to you an Fam W-2 and the "Satory empioyae" bax on that form wan chackad 2 Retuma and allovance a Subtrat ineom ine 4 Cant of goads oid rom line 42 5 Gros prolt Subtract ine 4 from ine Oher income, inclding tederal and state ganoline or fual ta Cndit or etund e instructiona Groas income. Add inesSand Part I Expenses. Enter expenses for business use of your home only on line 30. Ofice xperas ee intruction Adatison Adveting 18 Pension 20 Car and truck apen Intuctional 18 lon and profharing plana Rent or a s iratructionas Vahicles machiny and pment Uner usine property Repairs is and mainterance. 21 10 Commiiona and t 206 11 Contract labor ja intrudiona 12 12 Depletion Depreciation and en 17 xpen deduction Included Pan Inatructions. 21 13 22 23 Supplas at inuded in Part not Tas and kara. 24 Tavel and ma 14 Employee baneft programa (other than on line 10. 14 15 15 Inuance jatherthan hea inatruction 16 Inteat jn inatuctiona 26 Wage Je amployment cedita- 27a Oher expenas from ine . b Reserved for uture use Ihrough 27a a Martgaga taka 1da 20 17 l oenan p home Ad in 29 29 Tantative prott or o. Subtract line 2 trom ine 7. 30 Expan tor bine u of your home. De natpot thes apee where Attach Form a2a unle uning the simplited mathod (ane intructiona Simplifed method flers anly anter the total nquare footage ot: your hame .Le the Simpted and the pat of your home uned tbusine Method Workahaet in the inatructiona to figure the amount to enter on line 30 31 Nat prafit or ea. Siract ine 30 trom line 29. . Fa profit, enter on both Schedule 1 (Fom 1040 or 104D-SR, Ine 3 or Fom 1040-NR, line 12 and on Schedule SE, line 2 f you checkad the box on line 1, inatruction. Eatates and truats, enter an Fam 101, ine a 31 -Ha baa youmuat gote line 30 If you have a lo, check the box that deacribes your invetment in thiaacivity e instruction. . you checkad 1a enter the los an bath Schedule 1 Form 1D4D ar 1040-SR, ine 3 jor Form 1040-NR ne 12 and on Schedule SE, ine 2 you checked the bax on line 1, te line 21 inatructiona. Estates and trusta, anter an Form 1041, nea • Hyou chackad 12 you munt attach Form G19a. Your lau may be limited. Al inventment rik 20O Some imvetment ia not at rak Far Paperwork Reduction Act Natica, e the aparate intructiona. Ca Na a SuedecForm 10 or 10-SR an
Page 2 SweFam t Part II Cost of Goods Sold a00 insructions) Method uned to O Loveer ot cont or markat eD oter tach plaration) valun dosing inventary: Coat 34 Wan them any charge in determining quantien, cont, or valations betwn opening and cloing inventory? If"Ya"attach pnon 15 Inventory at beginning of year. IHaterent trom laat year'ı caning invetory, attach epiaration as E Puchaas l cont of le wiran t peseral u 37 Cont of labor. Do nat include any amounts paid to yoursa 37 Matetas and pple за 40 Add ines 35 tyough 2a 41 Inventory at end of year 41 42 Cost of goods aold. Subtract ine 41 from line 40 Enter the reut hem and on ine 4 Part IV Information on Your Vehicle. Complete this part only if you are claiming car or truck expenses on line 9 and are not reguired to file Form 4562 for this businesa. See the instructions for line 13 to find out if you must file Form 4562. 43 When did you plac your vehicie in sarvice tor busine purpon? month, day, yea Of the total mumber of milen you drove your vehicle during 2O19, enter the number of mies you uned your vehicie for: 44 Commuting e iratructione E Cher 45 Wan your vehicle avalable far peroral une during of-duty houn? Yes O No 46 Do you jor your spsune have another vahice avalabie for pernonal una?. O Yen 47a Do you have evidenoe to upport your deduction b ItYa"ithe evidence wrten? Other Expenses. List below business expenses not included on lines 8-26 or line 30. O Yes Part V Total other epenan. Enter hare and on line 27a 48 Suhedeorm 1o or 10-Sn
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Answer #1

Ans 1.

Schedule C using Accrual Method
Description Accrual
Income
Servicing Revenue:
Landscaping Revenue 78,000
December Landscape Services 11,000
Prepaid Landscape Services 300
Sales of Inventory:
Tree Sales 14,000
A Gross Profit 103,300
Non-incidental material supplies 12,800
Car and Truck expenses:
SUV Operating Expenses 5,335
BMW Operating Expenses 306
Insurance 1,200
Rent:
Shop 4,800
Trailer 200
Travel and business meals:
Travel to NY Seminar 1,435
Business dinner with clients 270
Wages and Subcontractor fees:
Part-time employees 23,000
Full-time employees (Ken) 30,000
Fountain Removal (Part-time employees) 850
Fence Installation (Prepaid subcontractor) 0
Other Expenses:
Books for Waiting Room 50
Education- Seminar 300
Uniforms 500
Bad Debts 280
Other Expenses (not in example):
Advertising 1,160
Depreciation 4,000
Interest 300
Legal and Professional Services 1,040
Office Expenses 1,500
Repairs and Maintenance 1,975
Taxes and Licenses 400
Utilities 2,200
B Total Deduction 93,901
(A-B) Net Business Income 9,399

Ans 2. The second page to the form of first form is missing due to which extensive analysis of cost of goods sold is not possible.

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