$2$

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Comprehensive Problem $2-77($LO $2-1,$ LO $2-2,$ LO $2-3,$ LO $2-4,$ LO $2-5)($Algo$)$

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$[$The following information applies to the questions displayed below.$]$

While completing undergraduate schoolwork in information systems, Dallin Bourne and Michael Banks decided to start a technology support company called eSys Answers. During year $1,$ they bought the following assets and incurred the following start$-$up fees:

Year $1$ Assets Purchase Date Basis

Computers $(5-$year$)$ October $30,$ Year $1$ $ $16,900$

Office equipment $(7-$year$)$ October $30,$ Year $110,000$

Furniture $(7-$year$)$ October $30,$ Year $16,800$

Start$-$up costs October $30,$ Year $120,420$

In April of year $2,$ they decided to purchase a customer list from a company providing virtually the same services, started by fellow information systems students preparing to graduate. The customer list cost $$13,420,$ and the sale was completed on April $30.$ During their summer break, Dallin and Michael passed on internship opportunities to grow their business into something they could do full time after graduation. In the summer, they purchased a small van $($for transportation, not considered a luxury auto$)$ and a pinball machine $($to help attract new employees$).$ They bought the van on June $15,$ Year $2,$ for $$34,000$ and spent $$4,900$ getting it ready to put into service. The pinball machine cost $$5,900$ and was placed in service on July $1,$ Year $2.$

Year $2$ Assets Purchase Date Basis

Van June $15,$ Year $2$ $ $38,900$

Pinball machine $(7-$year$)$ July $1,$ Year $25,900$

Customer list April $30,$ Year $213,420$

Assume that eSys Answers does not claim any $179$ expense or bonus depreciation. $($Use MACRS Table $1,$ Table $2,$ Table $3,$ Table $4$ and Table $5.)$

Note: Round your intermediate calculations and final answers to the nearest whole dollar amount.

Comprehensive Problem $2-77$ Part b $($Algo$)$

Required:

b$.$ Complete eSys Answers's Form $4562$ for Year $1.$

$($Input all values as positive numbers. Use $2024$ tax rules regardless of year on tax form. Assets acquired during Year $1$ has to be entered under Section B part of Form $4562,$ page $1.$ Do not skip rows when entering Amortization of cost under line item $42$ of Form $4562.)$