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?