Depreciation (to be computed), Cost Accounting

Assignment Help:

I just do not know which form those numbers should go in. I would canculate the results myself. Thanks
John and Ellen Brite are married and file a joint return. They have no dependents. John owns an unincorporated specialty electrical lightning retail store, Brite-On. Brite-On had the following assets on January 1, 2012:
Old store building purchased april 1, 1999: $100,000
Equipment (7-year recovery)purchased January 10,2007: $30,000
Inventory valued using FIFO method: 4,000 light bulbs: $5/bulb
Brite-On purchased a competitor's store on March 1, 2012 for $107,000. The purchase price include the following:
New store building: $60,000(FMV)
Land: $18,000(FMV)
Equipment:(5-year recovery): $11,000(FMV)
Inventory: 3,000 lights bulbs: $6/bulb(cost)
On Junes 30,2012, Brite-On sold the 7-year recovery period equipment for $12,000. Brite-On leased a $30,500 car for $500/month beginning on January 1,2012. The car is used 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 2011 at a cost of $7/bulb. Brite-On had the following revenues(in addition to the sales of light bulbs) an additional expenses:
Service revenue: $64,000
Interest expense on business loans: $4,000
Auto expenses (gas, oil, etc): $3,800
Taxes and licenses: $3,300
Utilities: $2,800
Salaries: $24,000
John and Ellen also had some personal expenses:
Medical bills: $4,500
Real property taxes: $3,800
State income taxes: $4,000
Home mortgage interest: $5,000
Charitable contributions (cash): $600
The Brites received interest income on a bank savings account of $275. John and Ellen made four $5,000 quarterly estimated tax payments. For self-employment tax purposes, assume John spent 100% of his time at the store while Ellen spends no time at the store.
Additional facts:
-Equipment acquired in 2007: the Brites elected out of bonus depreciation and did not elect Sec. 179
-Equipment acquired in 2012: the Brites elected Sec. 179 to expense the cost of the 5-year equipment but elected out of bonus depreciation
-Lease inclusion rules require that Brite-On reduces its deductible lease expense by $8


Complete their 2012 Form 1040, Schedules A, and SE

 


Related Discussions:- Depreciation (to be computed)

Cost volume analysis, Production of a particular product costs $50 per mate...

Production of a particular product costs $50 per material, $80 per labour and variable overhead is 75% of labour cost. If the selling price per unit is $230 and fixed cost amounts

Evaluate the relevant cost, Question PART A A company manufactur...

Question PART A A company manufactures a single product and the data concerning the product is as follows: - Sales price of $10 - Marginal cost of $6. - Fixed

Contract costing, Contract Costing It is a form of exact order costing...

Contract Costing It is a form of exact order costing, which is applied to relatively large cost units that normally get a considerable length of time to complete as an example

Goods and services tax, William Potter is a plumber currently operating as ...

William Potter is a plumber currently operating as a Sole Trader in Levin. William has approached you, a tax accountant, for your advice on certain tax matters. William's brothe

Standard costing and variance analysis using kaizen costing, Discuss how SD...

Discuss how SD can use standard costing and variance analysis to prepare meaningful reports when using Kaizen Costing. By the use of standard costing and variance analysis, fr

Depreciation, This is the amount charged due to the usage and passage of ti...

This is the amount charged due to the usage and passage of time. Fixed assets are utilized for earning revenue. Thus, a decrease in their value is considered to be the operational

Prepare the entry to assign factory labor to production, The gross earnings...

The gross earnings of the factory workers for Vargas Company during the month of January are $66,000. The employer's payroll taxes for the factory payroll are 8,000. The fringe ben

Calculate the dead weight loss of the tariff, (a) Calculate Mexico's produc...

(a) Calculate Mexico's producer surplus and consumer surplus in autarky. (b) Calculate the number of Mexican imports with as well as without the Tarriff. (c) Calculate Mexico

Prepare the journal entries to record depreciation, Moore Corporation follo...

Moore Corporation follows a policy of a 10% depreciation charge per year on all machinery and a 5% depreciation charge per year on buildings (the corporation uses the nearest full

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd