The Brocks Business had the following income and expenses:2. Assume th

QUESTION

The Brocks Business had the following income and expenses:2. Assume that Westchester Wood is a HOBBYa. Identify ezpenditures (ignore any that would be capitalized) that are allowed and to what extent andb. Identify which expenditures are Tier 1, Tier 2, or Tier 3 expenses.1. Re¦
T1 is Capital Exp T2 is Revenue exp T3 is Owners drawings A “ Allowed D- Not allowed 1. Receipts from sales of unfinished furniture $65,000 “ T2, A 2. Receipts from services to stain/paint furniture $12,000, “ T2, A 3. Receipts from sales of paint and stain products $1,000 “ T2, A 4. Cost of furniture $38,000 “ T2,, A 5. Costs of¦

s and paints $2500 “ T2, A 6. Depreciation expense on building $7000 “ T2, A 7. Advertising $1,200 “ T2, A 8. Advertising $200 “ T2, A 9. Auto Expenses(delivering furniture) $900 “ T2, A 10. Loading Dock (new) $22,000 “ T1, A

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