a. what are tge maximum cost recovery deductions for eSys Answers for Year 1 and Year 2?

b. Complete eSys Answer's Form 4562 for Y1.

c. what is eSys Answer's basis in each of its assets at tge end of Year 2?

Required information (The following informiktion applies to the questions displayed below) While completing undergraduate school work in information systems, Dalin 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 $16.000 office equipment (7-year) October 30, Year 1 10,000 Turniture (7-year) October 30, Year 1 5,000 Start-up costs October 30, Year 1 18,800 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 $11,800, and the sale was completed on April 30. During their summer break, Dallin and Michael passed on internship opportunities in an attempt to really 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 $25,000 and spent $4,000 getting it ready to put into service. The pinball machine cost $5,000 and was placed in service on July 1 Year 2 Year Assets Purchase Date Basta Van June 15, Year 2 $ 29,000 Pinball machine (-year July 1, Year 2 5,000 Customer list April 30, Year 2 11,800 Assume that eSys Answers does not claim any 5179 expense or bonus depreciation (Use MACRS Table 1. Table 2. Table 3 Table 4 and Table 5) (Round your intermediate calculations and final answers to the nearest whole dollar amount.) Required: a. What are the maximum cost recovery deductions for eSys Answers for Year 1 and Year 2? c. What is eSys Answers' basis in each of its assets at the end of Year 22 Table 1 MACRS Half-Year Convention Year 1 Year 2 Year 3 Year 4 20-Year 3.750% 7.219 6.677 6.177 5.713 5.285 Depreciation Rate for Recovery Period 3-Year 5-Year 7-Year 10-Year 15-Year 33.33% 20.00% 14.29% 10.00% 5.00% 44.45 32.00 24.49 18.00 9.50 14.81 19.20 17.49 14.40 8.55 7.41 11.52 12.49 11.52 7.70 11.52 8.93 9.22 6.93 5.76 8.92 7.37 6.23 8.93 6.55 5.90 4.46 6.55 5.90 6.56 5.91 6.55 5.90 3.28 5.91 5.90 5.91 5.90 5.91 2.95 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10 Year 11 Year 12 Year 13 Year 14 Year 15 4.888 4.522 4.462 4.461 4.462 4.461 4.462 4.461 4.462 4.461 4.462 4.461 4.462 4.461 2.231 Year 16 Year 17 Year 18 Year 19 Year 20 Year 21 Dion: For property placed in service during the first quarter Depreciation Rate for Recovery Period 5-Year 7-Year Year 1 35.00% 25.00% Year 2 26.00 21.43 Year 3 15.60 15.31 Year 4 11.01 10.93 Year 5 11.01 8.75 Year 6 1.38 8.74 Year 7 8.75 Year 1.09 TABLE 26 MACRS Mid-Quarter Convention: For property placed in service during the second quarter Depreciation Rate for Recovery Period 5-Year 7-Year Year 1 25.00% 17.85% Year 2 30.00 23.47 Year 3 18.00 16.76 Year 4 11.37 11.97 Year 5 11.37 8.87 Year 6 4.26 8.87 Year 7 8.87 Year 8 3.34 TABLE 2c MACRS Mid-Quarter Convention: For property placed in service during the third quarter Depreciation Rate for Recovery Period 5-Year 7-Year Year 1 15.00% 10.71% Year 2 34.00 25.51 Year 3 20.40 18.22 Year 4 12.24 13.02 Year 5 11.30 9.30 Year 6 7.06 8.85 Year 7 8.86 Year 8 5.53 TARIFI TABLE 24 MACRS-Mid Quarter Convention: For property placed in service during the fourth quarter Depreciation Rate for Recovery Period 7-Year 3.57% Year 1 5-Year 5.00% 38.00 22.80 27.55 19.68 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 13.68 10.94 14.06 10.04 8.73 9.58 8.73 7.64 b. Complete eSys Answers's Form 4562 for Y1 (Input all values as positive numbers. Use 2021 tax rules regardless of year on tax form. Assets acquired during Year 1 has to be entered under Section 8 part of Form 4562, page 1. Do not skip rows when entering Amortization of cost under line item 42 of Form 4562.) Form 4562 PG Form 4562 PG 2 nes Form 4562 Page 1 and 2. Form 4562 Depreciation and Amortization OMB No 1546-0172 (Including Information on Listed Property) 2020 Department of Treasury Attach to your tax retum Wamevenue Service (99 Go to www.inform42 fortructions and the latest information Altachment Sequence No 179 Name Shown on ilum Les Of My to which this for Gerlying rumor ) Sys Answers Part 1 Election To Expense Certain Property Under Section 170 Note: If you have any sted property.completo Port V before you.complete wit/ Manrum amount nicion 2 Total Cost of section 17 property iced in service and The cost of property before reduction to action) 4 Reduction in imitaron Surine 3 bromine 0 Dolation for a year and to tra loro artister married ingewys ons O Den of prey by Costumes le) Elect 4 7 Loty Emerter 29 Tetcost of section 17 property Admin Tvedettin theorie 1 Carrer den tromne 13 of your 2018 11 Geof 0 0 0 10 Form 4562 PG Form 4562 PG 1 2 ces Form 4562 (2020) Page 2 Part V Listed Property (Include automobiles, certain other vehicles, certain aircraft, and property used for entertainment, recreation, or amusement.) Note: For any vehicle for which you are using the standard mileage rate or deducting lone expense, complete only 240, 240, couns (6) through (o) of Section A all of Section B, and Section Ci applicable Section A-Depreciation and Other Information (Caution: See the instructions for limits for passenger automobilos) 21 Do you have evidence to support the businessesment daimod Yes No 24 "Yos," the evidence willen? Y NO (a) Type of (b) Date c) Business property ( placed in (5) Cost or other (0) Basis for depreciation 00 investment veides lo) service ih) Depreciation Elected section (businesinvestments Recovery basis Method Convention only 170 cost deduction maddyyyy period percorage 25 Speca depresionatowance for qualidated property placed in service Gurra me tax year and used more than 50% in a qualified business use Instructions 25 26 Property used more than 50% in a qualified businesse 27 Property used on a quarted business SL SL SL- 20 0 28 Add amounts incolum chines 25 rough 27 Enter here and online 21, page 1 20 Add amounts incluine Enter here and on page 1 29 0 Required information (The following information applies to the questions displayed below.) While completing undergraduate school work in Information systems, Dalin 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 set Purchase Date Basi Computers (5-year) October 30, Year 1 $16,000 office equipment (7-year) October 30, Year 1 10,000 Purniture (7-year) October 30, Year 1 5,000 Start-up costs October 30, Year 1 18,800 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 $11,800, and the sale was completed on April 30. During their summer break, Dallin and Michael passed on internship opportunities in an attempt to really 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 $25,000 and spent $4,000 getting it ready to put into service. The pinball machine cost $5,000 and was placed in service on July 1. Year 2. Year 2 Assets Purchase Date Basis Van June 15, Year 2 $ 29,000 Pinball machine (7-year) July 1, Year 2 Customer list April 30, Year 2 11,800 5,000 Assume that eSys Answers does not claim any 5179 expense or bonus depreciation. (Use MACRS Table 1. Table 2. Table 3. Table 4 and Table 5.) (Round your intermediate calculations and final answers to the nearest whole dollar amount.) Required: a. What are the maximum cost recovery deductions for eSys Answers for Year 1 and Year 2? c. What is eSys Answers' basis in each of its assets at the end of Year 2? Complete this question by entering your answers in the tabs below. Rega Reqc What are the maximum cost recovery deductions for eSys Answers for Year 1 and Year 2? Recovery Deduction Year 1 Year 2 Rega Reqc > Required: a. What are the maximum cost recovery deductions for eSys Answers for Year 1 and Year 2? c. What is eSys Answers' basis in each of its assets at the end of Year 2? Complete this question by entering your answers in the tabs below. Reg A ReqC What is eSys Answers' basis in each of its assets at the end of Year 2? Adjusted Basis Original Immediate Year 1 Cost Year 2 Cost Year 2 Ending Asset Basis Expense Recovery Recovery Basis Computer Equipment Office Equipment Furniture Start-up costs Van Pinball machine Customer List 0 0 $ $ 0 $ 0 $ Totals S 0