Question
In: Accounting
Karane Enterprises, a calendar year manufacturer based in College Station, Texas, began business in 2017. In...
Karane Enterprises, a calendar year manufacturer based in College Station, Texas, began business in 2017. In the process of setting up the business, Karane has acquired various types of assets. Below is a list of assets acquired during 2017:
Assets Cost Date Placed in Service
Office furniture 150,000 2/3/17
Machinery 1,560,000 7/22/17
Used delivery truck 40,000 8/17/17
During 2017, Karane was very successful (and had no 179 limitation) and decided to acquire more assets this next year to increase its production capacity. These are the assets acquired during 2018:
Assets Cost Date Placed in Service
Computers & info syst 400,000 3/31/18
Luxury auto 80,000 5/26/18
Assembly equip 1,200,000 8/15/18
Storage bldg. 700,000 11/13/18
Karane generated taxable income in 2018 of $1,732,500 for purposes of computing the 179 expense.
Required:
Compute the maximum 2018 depreciation deductions including 179 expense (ignoring bonus depreciation) AND Compute Part 1 of Form 4562.
Solutions
ekkarill92 answered 1 year agoRelated Solutions
Karane Enterprises, a calendar-year manufacturer based in College Station, Texas, began business in 2017. In the...
Karane Enterprises, a calendar-year manufacturer based in
College Station, Texas, began business in 2017. In the process of
setting up the business, Karane has acquired various types of
assets. Below is a list of assets acquired during 2017:
Asset
Cost
Date Placed
in Service
Office furniture
$
150,000
02/03/2017
Machinery
1,560,000
07/22/2017
Used delivery truck*
40,000
08/17/2017
*Not considered a luxury automobile.
During 2017, Karane was very successful (and had no §179
limitations) and decided to acquire more assets this...
Karane Enterprises, a calendar-year manufacturer based in College Station, Texas, began business in 2018. In the...
Karane Enterprises, a calendar-year manufacturer based in
College Station, Texas, began business in 2018. In the process of
setting up the business, Karane has acquired various types of
assets. Below is a list of assets acquired during 2018:
Asset
Cost
Date Placed in Service
Office furniture
$
150,000
02/03/2018
Machinery
1,560,000
07/22/2018
Used delivery truck*
40,000
08/17/2018
*Not considered a luxury automobile.
During 2018, Karane was very successful (and had no §179
limitations) and decided to acquire more assets in...
Karane Enterprise, a calendar year manufacturer based on college Station, Texas, began business in 2017. In...
Karane Enterprise, a calendar year manufacturer based
on college Station, Texas, began business in 2017. In the process
of setting up the business, Karane has acquired various types of
assets. Below is a list of assets acquired during 2017 :
Assets.
Costs. Date in service
Office furniture. 150,000.
2/3/2017
Machinery.
1,560,000. 7/22/2017
Used delivery trucks 40,000. 8/17/2017
During 2017, Karane was very successful (and had no
179 limatation) and decided to aquire more assets this next year to
increase its...
XYZ is a calendar-year corporation that began business on January 1, 2017. For 2017, it reported...
XYZ is a calendar-year corporation that began business on
January 1, 2017. For 2017, it reported the following information in
its current year audited income statement. Notes with important tax
information are provided below.
XYZ corp.
Book
Income
Income
statement
For current
year
Revenue from sales
$
40,000,000
Cost of Goods Sold
(27,000,000
)
Gross profit
$
13,000,000
Other
income:
Income from investment in
corporate stock
300,000
1
Interest income
20,000
2
Capital gains (losses)
(4,000
)
Gain or loss...
At the beginning of the year, Miranda began a calendar-year business and placed in service the...
At the beginning of
the year, Miranda began a calendar-year business and placed in
service the following assets during the year:
Date
Cost
Asset
Placed in
Service
Basis
Computers
1/30
$
50,500
Office
desks
2/15
$
54,500
Machinery
7/25
$
97,500
Office
building
8/13
$
430,000
Assuming Miranda
elects out of bonus depreciation and does not elect §179 expensing
, answer the following questions: (Use MACRS Table 1, Table 2,
Table 3, Table 4 and Table 5.) (Do not round...
XYZ is a calendar-year corporation that began business on January 1, 2020. For the year, it...
XYZ is a calendar-year corporation that began business on
January 1, 2020. For the year, it reported the following
information in its current-year audited income statement. Notes
with important tax information are provided below. Use Exhibit
16-6.
XYZ corp.
Book
Income
Income statement
For current year
Revenue from sales
$
40,000,000
Cost of Goods Sold
(27,000,000
)
Gross profit
$
13,000,000
Other income:
Income from investment in corporate stock
300,000
1
Interest income
20,000
2
Capital gains (losses)
(4,000
)...
XYZ is a calendar-year corporation that began business on January 1, 2018. For the year, it...
XYZ is a calendar-year corporation that began business on
January 1, 2018. For the year, it reported the following
information in its current-year audited income statement. Notes
with important tax information are provided below. Use Exhibit
16-6.
XYZ corp.
Book
Income
Income statement
For current year
Revenue from sales
$
40,000,000
Cost of Goods Sold
(27,000,000
)
Gross profit
$
13,000,000
Other income:
Income from investment in corporate stock
300,000
1
Interest income
20,000
2
Capital gains (losses)
(4,000
)...
XYZ is a calendar-year corporation that began business on January 1, 2018. For the year, it...
XYZ is a calendar-year corporation that began business on
January 1, 2018. For the year, it reported the following
information in its current-year audited income statement. Notes
with important tax information are provided below. Use Exhibit
16-6.
XYZ corp.
Book
Income
Income statement
For current year
Revenue from sales
$
40,000,000
Cost of Goods Sold
(27,000,000
)
Gross profit
$
13,000,000
Other income:
Income from investment in corporate stock
300,000
1
Interest income
20,000
2
Capital gains (losses)
(4,000
)...
XYZ is a calendar-year corporation that began business on January 1, 2018. For the year, it...
XYZ is a calendar-year corporation that began business on
January 1, 2018. For the year, it reported the following
information in its current-year audited income statement. Notes
with important tax information are provided below.
XYZ corp.
Book
Income
Income statement
For current year
Revenue from sales
$
40,000,000
Cost of Goods Sold
(27,000,000
)
Gross profit
$
13,000,000
Other income:
Income from investment in corporate stock
300,000
1
Interest income
20,000
2
Capital gains (losses)
(4,000
)
Gain or loss...
3. At the beginning of the year, Poplock began a calendar-year dog boarding business called Griff’s...
3. At the beginning of the year, Poplock began a calendar-year
dog boarding business called Griff’s Palace. Poplock bought and
placed in service the following assets during the year:
Asset Date
Acquired Cost Basis
Computer
equipment 3/23
$5,000
Dog grooming
furniture 5/12
$7,000
Pickup
truck 9/17 $10,000
Commercial
building 10/11 $280,000
Land (one
acre) 10/11 $80,000
Assuming Poplock does not elect §179 expensing or bonus
depreciation, what is Poplock’s year 1 depreciation expense for
each asset?
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