Beginning Inventory $15,500$

Purchased $487,700$

Ending Inventory $18,200$

Cost of Goods Sold $485,000$

Hav A Java

Profit and Loss Statement

For Year Ending December $31,2022$

Beverage and Food Sales $ $966,000$

Gross Revenue $966,000$

Beverage and Food COGS $485,000$

Wages for Baristas $($COGS$)$ $ $112,320$

Payroll taxes $($including unemployment$)8,986$

Total Cost of Goods Sold $606,306$

Gross Profit $359,694$

Advertising $6,500$

Depreciation Expense $2,498$

Supplies $28,000$

Vehicle Expense $900$

Office Supplies $2,000$

Utilities $7,200$

Rent for Land $24,000$

Insurance $4,000$

Holiday Party for Employees $1,500$

Total Expenses $76,598$

Net Income $ $283,096$

In February of $2023,$ during the preparation of Julia's $2022$ return, you explained to her the options for using either the section $179$ deduction or special depreciation for the purchases of her $2022$ assets. In her first few years in business, she was learning so much, depreciation was too confusing for her. When you showed her the tax savings she would receive to benefit her for $2022,$ she understood how this might change her choices for additional larger assets she may purchase in $2023.$

Other Information

If Julia decided to use special depreciation for the assets purchased in $2022,$ Julia's refund would increase by what amount?

$$571$

$$757$

$$1,044$

$$3,200$