Thom Jones (SSN 000-00-1111) is an unincorporated manufacturer of widgets. He us
ID: 2457077 • Letter: T
Question
Thom Jones (SSN 000-00-1111) is an unincorporated manufacturer of widgets. He uses the LCM method to value his inventory and reports the following for 2014:
Sales (less returns and allowances) $1,250,000
Cost of goods sold 500,000
Office expenses 10,000
Depreciation* ?
Legal services 4,000
Salary expenses 36,000
Travel expenses 30,000
Repair expenses 20,000
* Information related to Mr. Jones's depreciation:
Cost of office furniture acquired and placed in service on
April 15, 2014 (7-year recovery). $480,000
Cost of other property acquired and placed in service on
August 1, 2014:
5-year recovery property (computers-not listed property) 6,000
7-year recovery property (equipment) 54,000
Depreciation on assets purchased prior to 2014: 28,000
Complete Thom's 2014 Form 4562 and Schedule C of Form 1040, assuming Thom elects to expense the maximum amount possible under Sec. 179 but elects out of bonus depreciation.
notes: The Maximum Sec. 179 Expense amounth for 2014 is 500,000
Recovery Period :
5 year percentage is 20.00%
7 year percentage is 14.29%
Explanation / Answer
Thom Jones (SSN 000-00-1111) is an unincorporated manufacturer of widgets. He us
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