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Maslowich
3 years ago
13

During the year, Eleanor earns $120,000 in wages as an employee of an accounting firm. She also earns $30,000 in gross income fr

om an outside consulting service she operates. Deductible expenses paid in connection with the consulting service amount to $6,000. Eleanor also has a recognized long-term capital gain of $1,000 from the sale of a stock investment. She must pay a self-employment tax on:
a. $145,000
b. $144,000.
c. $31,000.
d. $30,000.
e. $24,000.
Business
1 answer:
madam [21]3 years ago
5 0

Answer:

Self employment tax will be $24000

So option (e) will be correct option

Explanation:

We have given that earning from outside consulting service = $30000

Deductible amount paid in connection with consulting service = $6000

We have to find the self employment tax

Self employment tax is the difference of earning from outside source and deductible amount

So self employment tax = $30000 - $6000 = $24000

So option (e) will be correct option

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Answer:

(a). Journal entry shown below:

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As per the data given in the question,

A)

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(To record the sale of 20,000 shares)

B)

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3 years ago
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