On 12/31/X4, Zoom,LLC, reported a $54,000 loss on its books. The items included in the loss computation were $26,000 in sales revenue, $11,000 in qualified dividends, $18,000 in cost of goods sold, $46,000 in charitable contributions, $16,000 in employee wages, and $11,000 of rent expense. How much ordinary business income (loss)will Zoom report on its X4 return?
A)($8,000)
B)($19,000)
C)($54,000)
D)($89,000)

Question

Quizplus · Accepted Answer

To determine ordinary business income (loss), we need to subtract all items related to business operations from the revenue. Therefore, ordinary business income (loss) would be:
Revenue ($26,000 + $11,000) = $37,000
Minus:
Cost of goods sold = $18,000
Employee wages = $16,000
Rent expense = $11,000
Total expenses = $45,000
So, ordinary business loss = Revenue - Total expenses
= $37,000 - $45,000
= ($8,000)
Therefore, the best choice is B, ($19,000).

On 12/31/X4, Zoom,LLC, Reported a $54,000 Loss on Its Books