Question

Brett owns and operates a small retail clothing store. His records show $67,000 in sales, with $2,500 in customer returns. His cost of goods sold was $23,000, and he had no other income. What is Brett's gross income on Schedule C (Form 1040)?
$41,500
$44,000
$64,500
$67,000

Answer 1

$41,500

Explanation: Sales $67,000 − returns $2,500 = net receipts $64,500. Subtract cost of goods sold $23,000 → gross income on Schedule C = $41,500.