2019 Income Tax Fundamentals accounting

How can I solve Line 14 on Form 4562 Depreciation and Amortization?

(a) Instructions

Comprehensive Problem 8-1

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 Returns and allowances		$351,700 4,000
Expenses: Beginning inventory (at cost) Cost of goods available for sale Less: ending inventory (at cost)	$84,300 100,700 185,000 75,000
Cost of goods sold Rent Insurance Legal and accounting fees Payroll Payroll taxes Utilities Office supplies Advertising		$110,000 23,800 1,500 2,800 37,200 3,440 1850 750 2,100

Sherrys bookkeeper has provided the book-basis fixed asset roll forward to be used in computing the depreciation. The tax lives of the assets are the same as the book lives shown in the fixed asset schedule. The truck is not considered a passenger automobile for purposes of the luxury automobile limitations. No Section 179 election is made. For tax purposes, Sherry elected out of bonus depreciation in all years except 2018.

Required: Complete Sherry's Schedule C and Form 4562.

• Make realistic assumptions about any missing data.
• Enter all amounts as positive numbers.
• If an amount box does not require an entry or the answer is zero, enter "0".
• If required round any dollar amount to the nearest dollar.

Sherrys bookkeeper has provided the following book-basis fixed asset rollforward:

Hopson Retail Fixed Asset Rollforward 12/31/2018 (book basis)
		DEPR		COST		2016	2017	2018		ACCUM		NET BOOK
ASSET	IN SERVICE	METHOD	LIFE	BASIS		DEPR	DEPR	DEPR		DEPR		VALUE
CASH REGISTER	2/15/2016	SL	5	9,800.00		1,796.67	1,960.00	1,960.00		5,716.67		4,083.33
2016 TOTAL ADDITIONS				9,800.00		1,796.67	1,960.00	1,960.00		5,716.67		4,083.33
RETAIL FIXTURES	10/12/2017	SL	7	4,500.00			160.71	642.86		803.57		3,696.43
FURNITURE	10/12/2017	SL	7	3,600.00			128.57	514.29		642.86		2,957.14
2017 TOTAL ADDITIONS				8,100.00		-	289.28	1,157.15		1,446.43		6,653.57
TOTAL				17,900.00		1,796.67	2,249.28	3,117.15		7,163.10		10,736.90
DELIVERY TRUCK	6/1/2018	SL	5	32,000.00				3,733.33		3,733.33		28,266.67
DESK AND CABINETRY	6/1/2018	SL	7	17,000.00				1,416.67		1,416.67		15,583.33
COMPUTER	6/1/2018	SL	5	3,500.00				408.33		408.33		3,091.67
2018 TOTAL ADDITIONS				52,500.00		-	-	5,558.33		5,558.33		46,941.67
TOTAL				70,400.00		1,796.67	2,249.28	8,675.48		12,721.43		57,678.57

Note: Don't use Part II or Part III below for listed property. Instead, use Part V.

Part II

Special Depreciation Allowance and Other Depreciation (Don't include listed property. See instructions.)

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Special depreciation allowance for qualified property (other than listed property) placed in service during the tax year. See instructions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

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