Calculating the depreciation for interiors unlimited

Reference no: EM133412673

Case Scenario: Year ending December 31, 2022 Jack Frost (social security number 666-66-0666) operates "Interiors Unlimited", which sells home furnishings at retail, as a sole proprietor during the entire year. The business address is 45 Boswell Blvd., Anytown, VA 20181. His employer identification number is 36-3457896. The business code is 442200. In order to clearly show business income, Mr. Frost maintains an inventory at cost, and he uses the accrual method of accounting for his sales and purchases. Interiors Unlimited does not manufacture any of the goods it sells. Total gross receipts of the business were $278,644 and returns and allowances amounted to $1,535. The business books showed the following information:

Inventory at beginning of year (valued at cost) . . . . . . $45,000

Merchandise purchased . . . . . . . . . . . . . . . . . . . . . . . . 97,000

Inventory at end of year . . . . . . . . . . . . . . . . . . . . . . . . 22,000

Truck expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 550

Depreciation (to be calculated - see below)

Other interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 300

Rent (property) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7,800

Repairs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 280

Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,000

Wages . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16,451

Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,450

Utilities and telephone . . . . . . . . . . . . . . . . . . . . . . . . . . 1,200

Advertising . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,240

Legal and accounting (includes $200 of tax preparation fees) . . . . . . . . . . . . 400

Office expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 125

Travel . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 400

Meals and entertainment . . . . . . . . . . . . . . . . . . . . . . . . 1,040

Miscellaneous . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 330

The business had the following depreciable property:

Computers purchased in March 2022 - orig. cost $ 2,432

Computers purchased in 2018 (mid-quarter, third quarter) - orig. cost 7,264

Equipment purchased in 2018 (mid-quarter, fourth quarter) - orig. cost 15,275

FFE purchased in 2016 (half-year) - orig. cost 10,500

Using, as applicable, Section 179, Bonus Depreciation and MACRS calculate the depreciation for 2022 for Interiors Unlimited to be reported on Schedule C of Jack Frost's 2022 Tax Return

Complete the Schedule C to report the net profit or loss for Interiors Unlimited, including
Calculating the depreciation for Interiors Unlimited for 2022.

Reference no: EM133412673

Questions Cloud

Why this is important for an organization to engage : an environmental scan should be a "continuous process". why this is important for an organization to engage and adopt as a formal continuous process.

Summarize the human rights that are relevant to a workplace : Summarize the human rights that are relevant to a workplace environment and how it applies to locations outside the US as well.

Calculate the total gross pay owing to all employees : Calculate the gross pay, deductions, and net pay for the Office Clerk (just this one employee). 2. Calculate the total gross pay owing to all employees

Describe of topic and its importance in developing family : Describe of the topic and its importance in developing family literacy partnerships. Discuss specific ways teachers can implement the assigned topic.

Calculating the depreciation for interiors unlimited : Complete the Schedule C to report the net profit or loss for Interiors Unlimited, including Calculating the depreciation for Interiors Unlimited

Analysis involves looking at the parts of systems : Analysis involves looking at the parts of systems. Synthesis involves looking at the whole system. To understand a system, we must look at its purpose

What demand pattern do you see in the plot : What demand pattern do you see in the plot? Compute seasonal indices. If the forecasted attendance for year 4 is 900, find the forecast for each season

Why might the irs challenge this situation : Why might the IRS challenge this situation? Will the IRS be successful? Why or why not?

What is the maximum amount she can deduct as moving expenses : Samantha earned $45,000 in Toronto and $4,000 in Ottawa. What is the maximum amount she can deduct as moving expenses

User Account

All Pages