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Ch10-P77 While completing undergraduate school work in information systems, Dallin Bourne and Michael Banks decided to start a technology support company called eSys Answers. During year 1, they bought the following assets and incurred the following start-up fees: Year 1 Assets Computers (5-year) Office equipment (7-year) Furniture (7-year) Start-up costs Purchase Date October 30, Y1 October 30, Y1 October 30, Y1 October 30, Y1 Basis $15,000 $10,000 $3,000 $17,000 In April of year 2, they decided to purchase a customer list from a company providing virtually the same services, started by fellow information systems students preparing to graduate. The customer list cost $10,000 and the sale was completed on April 30th. During their summer break, Dallin and Michael passed on internship opportunities in an attempt to really grow their business into something they could do full-time after graduation. In the summer, they purchased a small van (for transportation, not considered a luxury auto) and a pinball machine (to help attract new employees). They bought the van on June 15, Y2 for $15,000 and spent $3,000 getting it ready to put into service. The pinball machine cost $4,000 and was placed in service on July 1, Y2. In April of year 2, they decided to purchase a customer list from a company providing virtually the same services, started by fellow information systems students preparing to graduate. The customer list cost $10,000 and the sale was completed on April 30th. During their summer break, Dallin and Michael passed on internship opportunities in an attempt to really grow their business into something they could do full-time after graduation. In the summer, they purchased a small van (for transportation, not considered a luxury auto) and a pinball machine (to help attract new employees). They bought the van on June 15, Y2 for $15,000 and spent $3,000 getting it ready to put into service. The pinball machine cost $4,000 and was placed in service on July 1, Y2. Year 2 Assets Van Pinball Machine (7-year) Customer List Purchase Date June 15, Y2 July 1, Y2 April 30, Y2 Basis $18,000 $4,000 $10,000 Assume that eSys Answers does not claim any $179 expense or bonus depreciation. What are the maximum cost recovery deductions for eSys Answers for Y1 and Y2? Complete eSys Answers' Form 4562 for Y1 (use the most current form Notes for you Requirement a. What are the maximum cost recovery deductions for eSys Answers for Y1 and Y2? Must show detailed calculations of cost recovery expenses for both Y1 and Y2. Requirement b. Complete eSys Answers' Form 4562 for Y1. Part III (MACRS Depreciation), Part IV (Summary) and Part VI (Amortization) are required. Ch10-P77 While completing undergraduate school work in information systems, Dallin Bourne and Michael Banks decided to start a technology support company called eSys Answers. During year 1, they bought the following assets and incurred the following start-up fees: Year 1 Assets Computers (5-year) Office equipment (7-year) Furniture (7-year) Start-up costs Purchase Date October 30, Y1 October 30, Y1 October 30, Y1 October 30, Y1 Basis $15,000 $10,000 $3,000 $17,000 In April of year 2, they decided to purchase a customer list from a company providing virtually the same services, started by fellow information systems students preparing to graduate. The customer list cost $10,000 and the sale was completed on April 30th. During their summer break, Dallin and Michael passed on internship opportunities in an attempt to really grow their business into something they could do full-time after graduation. In the summer, they purchased a small van (for transportation, not considered a luxury auto) and a pinball machine (to help attract new employees). They bought the van on June 15, Y2 for $15,000 and spent $3,000 getting it ready to put into service. The pinball machine cost $4,000 and was placed in service on July 1, Y2. In April of year 2, they decided to purchase a customer list from a company providing virtually the same services, started by fellow information systems students preparing to graduate. The customer list cost $10,000 and the sale was completed on April 30th. During their summer break, Dallin and Michael passed on internship opportunities in an attempt to really grow their business into something they could do full-time after graduation. In the summer, they purchased a small van (for transportation, not considered a luxury auto) and a pinball machine (to help attract new employees). They bought the van on June 15, Y2 for $15,000 and spent $3,000 getting it ready to put into service. The pinball machine cost $4,000 and was placed in service on July 1, Y2. Year 2 Assets Van Pinball Machine (7-year) Customer List Purchase Date June 15, Y2 July 1, Y2 April 30, Y2 Basis $18,000 $4,000 $10,000 Assume that eSys Answers does not claim any $179 expense or bonus depreciation. What are the maximum cost recovery deductions for eSys Answers for Y1 and Y2? Complete eSys Answers' Form 4562 for Y1 (use the most current form Notes for you Requirement a. What are the maximum cost recovery deductions for eSys Answers for Y1 and Y2? Must show detailed calculations of cost recovery expenses for both Y1 and Y2. Requirement b. Complete eSys Answers' Form 4562 for Y1. Part III (MACRS Depreciation), Part IV (Summary) and Part VI (Amortization) are required

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