This is part 6-7 of problem 6-68 The country is United States 6. Jaron reported

Question

This is part 6-7 of problem 6-68 The country is United States

6. Jaron reported the following items of income and expense from his consulting practice: a. Consulting fees received b. Wages expense c. Rent expense d. Depreciation e. Other expenses $185,000 $47,400 $20,000 $2,100 $17,000 What is Jaron's net income from his consulting practice? 7. Calculate Jaron's 2017 income tax liability. Ignore any available credits and self employment taxes and assume the standard deduction exceeds any itemized deductions Jaron has.

Explanation / Answer

6. Jaron's net income would be Income minus all expeses, in this case it would be

Consulting fee $185,000

Less: Wages expenses $47,400

Less: Rent expenses $20,000

Less: Depreciation $2,100

Less: Other expenses $17,000

Equals $98,500 would be his Net income

7. Jarons tax liabillity would be based on the net income he has which would be $98,500 * applicable tax rate.

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