Comprehensive Problem 7-1

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:

The truck is not considered a passenger automobile for purposes of the luxury automobile limitations. No Section 179 election is made.

Required:

The business has MACRS depreciation of $3,651 on assets placed in service prior to 2016. Sherry uses bonus depreciation but does not make the election to expense, complete her 2016 Schedule C and Form 4562.

Compute the Special depreciation allowance for qualified property (other than listed property) placed in service during the tax year (see instructions) ??????

Part II

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

Comprehensive Problem 7-1 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 $351,700 Returns and allowances 4,000 Expenses: $ 84,300 Beginning inventory (at cost) Add: purchases 100,700 Cost of goods available for sale 185,000 Less: ending inventory (at cost) 75,000 Cost of goods sold $110,000 Rent 23,800 Insurance 1,500 Legal and accounting fees 2,800 Payroll 37,200 Payroll taxes 3,440 Utilities 1,850 Office supplies 750 Advertising 2,100 On June 1 of this year, Sherry purchased the following new assets for the store: Heavy-duty truck Desk and file cabinets Computer Depreciable Basis Recovery Period $31,000 5 years 17,000 7 years 3,000 5 years The truck is not considered a passenger automobile for purposes of the luxury automobile limitations. No Section 179 election is made. Required: The business has MACRS depreciation of $3,651 on assets placed in service prior to 2016. Sherry uses bonus depreciation but does not make the election to expense, complete her 2016 Schedule C and Form 4562. Compute the Special depreciation allowance for qualified property (other than listed property) placed in service during the tax year (see instructions) ?????? Part II Special Depreciation Allowance and Other Depreciation (Don't include listed property.) (See inst 14 Special depreciation allowance for qualified property (other than listed property) placed in service during th year (see instructions for 2016)