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 2015:
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, 2015 (7-year recovery)..................................................................$480,000
Cost of other property acquired and placed in service on
August 1, 2015:
5-year recovery property (computers-not listed property)...........................6,000
7-year recovery property (equipment)..........................................................54,000
Depreciation on assets purchased prior to 2015: ......................................28,000
Complete Thom’s 2015 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.