uepietion l deduction amount assuming th d. Based on the information above, which method should be used for the IDCS? Expla. at the IDCs are expensed? or the IDCs? Explain. COMPREHENSIVE PROBLEM ) are married and a joint return. They have no dependents. lohn owns an unincorporated specialty elec trical lighting retail store, Brite-On. Brite-On had the following assets on January 1,2 ssets Cost Old store building purchased April 1, 1999 Equipment (7-year recovery) purchased January 10, 2009 Inventory valued using FIFO method: 4,000 light bulbs $100,000 30,000 SS/bulb Brite- On purchased a competitor's store on March 1, 2014, for $107,000. The purchase price included the following New store building Land Equipment (5-year recovery) Inventory: 3,000 light bulbs $60,000 (FMV) 18,000 (FMV) 11,000 (FMV) S 6/bulb (cost) On June 30, 2014, Brite-On sold the 7-year recovery period equipment for $12,000. Brite-On leased a $30,500 car for $500/month beginnin g on January 1, 2014. The car is 100% for business and was driven 14,000 miles during the year Brite-On sold 8,000 light bulbs at a price of $15/bulb during the year. Also, Brite-On made additional purchases of 4,000 light bulbs in August 2014 at a cost of $7/bulb. Brite On had the following revenues (in addition to the sales of light bulbs) and additional expenses: Service revenues Interest expense on business loans Auto expenses (gas, oil, etc.) Taxes and licenses Utilities Salaries $64,000 4,000 3,800 3,300 2,800 24,000 92 John and Ellen also had some personal expenses: Sc Medical bills Real property taxes State income taxes Home mortgage interest Charitable contributions (cash) $4,500 3,800 4,000 5,000 600 The Brites received interest income on a bank savings account of S2 . John and Ellen made four $5,000 quarterly estimated tax payments. For self-employment tax pur- poses, assume John spent 100% of his time at the store while Ellen spends no time at the store. Additional Facts: .Equipment acquired in 2009: The Brites elected out of bonus depreciation and did not elect Sec. 179