AC 2520

AC2520: Module 3 Other Tax Considerations for Individuals

Lab 3.2

Tax Form/Return Preparation

1

Thom Jones (SSN 000-00-1111) is an unincorporated manufacturer of widgets. He uses the Least Common

Multiple (LCM) method to value his inventory and reports the following for 2013:

* Information related to Mr. Jones’s depreciation:

Using the given information, perform the following task:

Complete Thom’s 2012 Form 4562 and Schedule C of Form 1040, assuming Thom elects to expense the

maximum amount possible under Sec. 179 but elects out of bonus depreciation.

Submission Requirements:

 Fill in the provided Form 4562 and Form 1040.

 Submit the detailed calculations in a Microsoft Excel Sheet.

• The submission should use the font specification: Arial; 12-point

Evaluation Criteria:

The lab rubric will be used to grade this assessment.

Sales (less returns and allowances)

Cost of goods sold

Office expenses

Depreciation*

Legal services

Salary expenses

Travel expenses

Repair expenses

$1,250,000

$500,000

$10,000

?

$4,000

$36,000

$30,000

$20,000

Cost of office furniture acquired and placed in service on April 15, 2013 (7-year recovery).

Cost of other property acquired and placed in service on August 1, 2013:

5-year recovery property (computers–not listed property)

7-year recovery property (equipment)

Depreciation on assets purchased before 2013:

$480,000

$6,000

$54,000

$28,000