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What is Karen’s net income from her practice? David’s salary 86,000Karen’s practice:Gross receipts 159,400Interest income on business account 1,110Expenses on office books:Attorney’s fees 650Business license 200Country club dues paid by practice 2,400County property taxes on office furnishings,computer system, and other equipment 275Depreciation on office furnishings & equipment 3,085Health insurance for receptionist 4,700Malpractice insurance 16,000Payroll taxes 987Professional journals and literature 1,285Receptionist’s salary 29,000Rent ‐ office 12,800Repairs and maintenance 1,160Utilities 9,340Individual retirement account contribution ‐ Karen 4,000Accounting fees paid for preparation of tax return, 50% of which is attributable to Karen’s business 900Real estate taxes 4,370Home mortgage interest expense 10,600
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