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)

Compute the break even point, Park & Morgan, a law firm, is considering ope...

Park & Morgan, a law firm, is considering opening a legal clinic for midde- and low income clients. The clinic would bill at a rate if $18 per hour. It would employ law students as

Difference between balance sheet and income statement, (i) Describe the di...

(i) Describe the difference between the balance sheet and the income statement in financial statements of companies. (ii) Give two examples of intangible assets and two exampl

Cost element, Cost Element Stage 1. Cost Elements The raw data co...

Cost Element Stage 1. Cost Elements The raw data concern with Labour, Expenses, and Materials are gathered from Invoices, Payroll, and Requisitions and Goods Issued Notes

Differential analysis, West Industries is a highly decentralized corporatio...

West Industries is a highly decentralized corporation with independent operating divisions. Each division is evaluated and rewarded based on its total net income. One of the divisi

Supplies and prepaid expenses, Inventory, Supplies and Prepaid Expenses ...

Inventory, Supplies and Prepaid Expenses You can well understand the requirements for carrying inventory. So as to  carry  on operations unhindered we require to have sufficien

Cash flow budget, the total (ie. aggregated) cashflows in respect to operat...

the total (ie. aggregated) cashflows in respect to operations, with details of annual cash inflows & annual outflows in respect to operations, the total (ie. aggregated) cashflo

Purposes of overhead cost analysis, Purposes of Overhead Cost Analysis ...

Purposes of Overhead Cost Analysis There are a number of situations whether the analysis of overhead costs will assist in the satisfactory evaluation of the relevant cost data

Budgeted, Question: Yamba Home Products is just beginning its fourth quar...

Question: Yamba Home Products is just beginning its fourth quarter, in which peak sales occur. The company has requested a $12,000, 90-day loan from its bank to help meet cash re

Using the dupont formula for rate of return on investment, The vice preside...

The vice president of operations of six layer computer Inc. is evaluating the performance of two divisions organized as investments centers. Invested assets and condensed income st

Prepare of the final accounts of a business, You are assisting the accounta...

You are assisting the accountant on the preparation of the final accounts of a business with a year-end of 31 December. A trial balance has been drawn up and a suspense account ope

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