Accounting exercise

In July of 2020, Destiny Freebird started a sole proprietorship called Magaliscious D’s Interior Design Services. Maggie D’s uses the cash method of accounting and Destiny has given you the following financial information for the year.Destiny needs you to prepare her 2020 Schedule C for her using all the information that follows. She also has the following additional questions and requests for you.

  • Include a detailed account listing for the Miscellaneous Expense account.

  • Provide a list of expenses not deducted on Schedule C and a list of revenues not includible on Schedule C, and where those expenses would be deducted if they were deductible and/or where the revenues would be included if required. Also provide a list of expenses from the information given that are not deductible at all and why they are not deductible. (See further instructions after the notes for the income statement.)

Use the information provided in the income statement and the additional information received from your client that follows to prepare your client’s Schedule C and to answer her questions, in addition to the requirements from your supervisor.

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