Thom Jones (SSN 000-00-1111) is an unincorporated manufacturer of widgets. He uses the LCM method to value his inventory and reports the following for 2012:
Sales (less returns and allowances) $1,250,000
Cost of goods sold 500,000
Office Expenses 10,000
Depreciation ?
Legal Expenses 4,000
Salary Expenses 36,000
Travel Expenses 30,000
Repair Expenses 20,000
Information related to Mr. Jones's depreciation:
Cost of office furniture acquired and placed in service on April 15, 2012 (7 year recovery).
Thom elected to expense the maximum amount possible under Sec. 179 and the bonus depreciation provision. $480,000
Cost of other property acquired and placed in service on August 1, 2012:
5-year recovery property (computers-not listed property) $6,000
7-year recovery property (equipment) 54,000
Depreciation on assets purchased prior to 2012: 28,000
Complete Thom's 20102Form 4562 and Schedule C of Form 1040.