(Answered) Comprehensive Problem 7-1 Sherry Hopson owns a retail family clothing store. Her store is located at 4321 Heather Drive, Henderson, NV 89002. Her...

Comprehensive Problem 7-1 Sherry Hopson owns a retail family clothing store. Her store is located at 4321 Heather Drive, Henderson, NV 89002. Her...

Comprehensive Problem 7-1Sherry Hopson owns a retail family clothing store. Her store is located at 4321 Heather Drive, Henderson, NV 89002. Her employer identification number is 95-1234321 and her Social Security number is 123-45-6789. Sherry keeps her books on an accrual basis. The income and expenses for the year are: The truck is not considered a passenger automobile for purposes of the luxury automobile limitations. No Section 179 election is made.Required: The business has MACRS depreciation of $3,651 on assets placed in service prior to 2016. Sherry uses bonus depreciation but does not make the election to expense, complete her 2016 Schedule C and Form 4562.Compute the Special depreciation allowance for qualified property (other than listed property) placed in service during the tax year (see instructions) ?????? Part II Special Depreciation Allowance and Other Depreciation (Don't include listed property.) (See instructions.)  Comprehensive Problem 7-1

 

Sherry Hopson owns a retail family clothing store. Her store is located at 4321 Heather Drive,

 

Henderson, NV 89002. Her employer identification number is 95-1234321 and her Social

 

Security number is 123-45-6789. Sherry keeps her books on an accrual basis. The income and

 

expenses for the year are:

 

Gross sales

 

$351,700

 

Returns and allowances

 

4,000

 

Expenses:

 

Beginning inventory (at cost)

 

$

 

84,300

 

Add: purchases

 

100,700

 

Cost of goods available for sale

 

185,000

 

Less: ending inventory (at cost)

 

75,000

 

Cost of goods sold

 

$110,000

 

Rent

 

23,800

 

Insurance

 

1,500

 

Legal and accounting fees

 

2,800

 

Payroll

 

37,200

 

Payroll taxes

 

3,440

 

Utilities

 

1,850

 

Office supplies

 

750

 

Advertising

 

2,100

 

On June 1 of this year, Sherry purchased the following new assets for the store:

 

Depreciable Basis

 

Recovery Period

 

Heavy-duty truck

 

$31,000

 

5 years

 

Desk and file cabinets

 

17,000

 

7 years

 

Computer

 

3,000

 

5 years

 

The truck is not considered a passenger automobile for purposes of the luxury automobile

 

limitations. No Section 179 election is made.

 

Required:

 

The business has MACRS depreciation of $3,651 on assets placed in service prior to 2016.

 

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DATE ANSWERED

Jan 02, 2020

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