Sherry Hopson owns a retail family clothing store. Her store is located at 4321 Heather Drive, Henderson, NV 89002. Her employer identification number is 95­ 1234321 and her Social Security number is 123­45­6789. Sherry keeps her books on an accrual basis. The income and expenses for the year are: 

Gross sales..................$351,700 

Returns and allowances..................4,000 

Expenses: 

Beginning inventory (at cost)..................$ 84,300 

Add: purchases..................100,700 

Cost of goods available for sale..................185,000 

Less: ending inventory (at cost)..................75,000 

Cost of goods sold..................$110,000 

Rent..................23,800 

Insurance..................1,500 

Legal and accounting fees..................2,800 

Payroll..................37,200 

Payroll taxes..................3,440 

Utilities..................1,850 

Office supplies..................750 

Advertising..................2,100

Sherry’s bookkeeper has provided the following book-basis fixed asset roll forward:

The truck is not considered a passenger automobile for purposes of the luxury automobile limitations. Required: For tax purposes, Sherry elected out of bonus depreciation in all years except 2018. She did not elect immediate expensing in any year. The tax lives of the assets are the same as the book lives shown in the fixed asset schedule above. Complete Sherry’s Schedule C and Form 4562. Make realistic assumptions about any missing data.

Hopson Retail Fixed Asset Rollforward 12/31/2018 (book basis) 2017 DEPR COST 2016 2018 ACCUM NET BOOK IN SERVICE METHOD ASSET CASH REGISTER LIFE BASIS DEPR 1,796.67 1,960.00 1,960.00 1,796.67 1,960.00 1,960.00 DEPR DEPR DEPR VALUE 2/15/2016 SL 9,800.00 9,800.00 5,716.67 4,083.33 2016 TOTAL ADDITIONS 5,716.67 4,083.33 10/12/2017 RETAIL FIXTURES SL 4,500.00 160.71 642.86 803.57 3,696.43 FURNITURE 10/12/2017 SL 3,600.00 128.57 514.29 642.86 2,957.14 2017 TOTAL ADDITIONS 8,100.00 289.28 1,157.15 1,446.43 6,653.57 TOTAL 17,900.00 1,796.67 2,249.28 3,117.15 7,163.10 10,736.90 6/1/2018 6/1/2018 6/1/2018 3,733.33 1,416.67 DELIVERY TRUCK SL 32,000.00 17,000.00 3,733.33 1,416.67 408.33 28,266.67 15,583.33 DESK AND CABINETRY SL COMPUTER SL 3,500.00 408.33 3,091.67 5,558.33 8,675.48 2018 TOTAL ADDITIONS 52,500.00 70,400.00 5,558.33 12,721.43 46,941.67 57,678.57 1,796.67 2,249.28 TOTAL