Yes.
Q1) The income is entered on Schedule C.
2) Since it is your first year and you don't have all your receipts, you will have to calculate the cost the best way you can. Yes, you do need receipts. The best way to deal with the bookkeeping aspect would be to get a credit card or bank account that you use exclusively for the business. You will still need to keep receipts.
3) Since you are not buying and then immediately selling you will need to keep an inventory. Your income is the $18,000 and your purchases are $12,000.
Exception for small business taxpayers. Inventory Pub 538
If you are a small business taxpayer, you can choose not to keep an inventory, but you must still use a method of accounting for inventory that clearly reflects income. If you choose not to keep an inventory, you won’t be treated as failing to clearly reflect income if your method of accounting for inventory treats inventory as non-incidental material or supplies, or conforms to your financial accounting treatment of inventories. If, however, you choose to keep an inventory, you generally must use an accrual method of accounting and value the inventory each year to determine your cost of goods sold in Part III of Schedule C.
Treating inventory as non-incidental material or supplies.
If you account for inventories as materials and supplies that are not incidental, you deduct the amounts paid to acquire or produce the inventoriable items treated as materials and supplies in the year in which they are first used or consumed in your operations.
4) No.
5) You will need to indicate that the Schedule C belongs to your wife.
