4. Paul practices under the name "Paul J. Vance, DDS." His business is located at 645 West Avenue, Cincinnati, OH 45211, and his employer identification number is 01-2222222. Paul's gross receipts during the year were $111,000. Paul uses the cash method of accounting for his business. Paul's business expenses are as follows: Advertising $ 1,200 Professional dues 490 Professional journals 360 Contributions to employee benefit plans 2,000 Malpractice insurance 3,200 Fine for overbilling State of Ohio for work performed on welfare patient 5,000 Insurance on office contents 720 Interest on money borrowed to refurbish office 600 Accounting services 2,100 Miscellaneous office expense 388 Office rent 12,000 Dental supplies 7,672 Utilities and telephone 3,360 Wages 30,000 Payroll taxes 2,400 In June, Paul decided to refurbish his office. This project was completed and the assets placed in service on July 1. Paul's expenditures included $8,000 for new office furniture, $6,000 for new dental equipment (seven-year recovery period), and $2,000 for a new computer. Paul elected to compute his cost recovery allowance using MACRS. He did not elect to use $179 immediate expensing, and he chose to not claim any bonus depreciation