Sherry Hopson owns a retail family clothing store. Her store is located at 4321 Heather Drive, Henderson,
Question:
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.
Ending InventoryThe ending inventory is the amount of inventory that a business is required to present on its balance sheet. It can be calculated using the ending inventory formula Ending Inventory Formula =...
Step by Step Answer:
Income Tax Fundamentals 2019
ISBN: 9781337703062
37th Edition
Authors: Gerald E. Whittenburg, Steven Gill