John Mason operates a consulting business, Mason Enterprises, as a sole proprietorship. He had to transfer $100,000 of stocks and securities into Mason Enterprise’s name to show financial viability for the business. During the current year, the business had the following income and expenses from operations:
|
Consulting revenue |
$125,000 |
|
Travel expenses |
40,000 |
|
Transportation |
3,000 |
|
Advertising |
7,000 |
|
Office expense |
3,000 |
|
Telephone |
1,000 |
|
Dividends |
5,000 |
|
Interest |
2,000 |
|
Charitable contribution |
1,000 |
|
Political contribution |
6,000 |
Determine the Schedule C net income. How are items not included in the Schedule C net income reported?