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)

Assumptions of break-even analysis, Assumptions of Break-Even Analysis ...

Assumptions of Break-Even Analysis 1. The break-even chart is fundamentally a static analysis; commonly changes can merely be displayed by drawing a new chart or a series of c

Find the amount of retained earnings at december, From the information prov...

From the information provided, determine: 1.) The amount of retained earnings at December 31 and 2.) The amount of revenues for the period. Additional data:1.)Expenses for the peri

Determine profit by using absorption costing, Determine Profit by Using Abs...

Determine Profit by Using Absorption Costing Assuming the fixed overhead absorption rate was Ksh.3 per litre, then what would be the profit utilizing absorption costing? a)

Overheads, How does functional classification of overheads like Manufacturi...

How does functional classification of overheads like Manufacturing overhead,Administrative overhead affect product cost or profit?

Profit and loss account, Both the parts, Profit and Loss Account and Tradin...

Both the parts, Profit and Loss Account and Trading Account of last account are interdependent upon each other. Gross Profit or loss plays a very important role in the calculation

Evaluate outstanding balance, Winston Duff is planning to borrow $225,000 ...

Winston Duff is planning to borrow $225,000 to purchase a new home. Mr. Duff is considering two fixed-rate financing alternatives offered by Horsepen Creek State Bank. The first

Occurrence of overhead variances, Occurrence of Overhead Variances Ove...

Occurrence of Overhead Variances Overhead variances arise mainly because of the conventions of the overheads absorption process. The overhead absorption rates employed in this

Weighted average method, Weighted Average Method This way is a perpet...

Weighted Average Method This way is a perpetual weighted average system whereas the issue price is recalculated after one of receipt of stocks taking into accounts both money

Calculate direct labour hour, Manson Manufacturing applies manufacturing ov...

Manson Manufacturing applies manufacturing overhead at a rate of $30 per direct labour hour a)when during the year was this rate computed b)Describe briefly how this rate was

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