Assume that Timberline Corporation has 2019 taxable income of $274,000 for purposes of computing the §179 expense. It acquired the following assets in 2019: (Use MACRS) Purchase AssetDate BasisFurniture (7-year)December 1$484,000Computer equipment (5-year)February 28 124,000Copier (5-year)July 15 64,000Machinery (7-year)May 22 514,000Total $1,186,000 a-1. What is the maximum amount of §179 expense Timberline may deduct for 2019?a-2. What is Timberline’s §179 carryforward to 2020, if any?b. What would Timberline’s maximum depreciation deduction be for 2019 assuming no bonus depreciation? (Round your intermediate calculations to the nearest whole dollar amount.)

Depreciation: Depreciation can be defined as the charge on the fixed assets of the company that reduces the value of the assets. Decrease in value is reported because of wear and tear of assets in operating activities. Depreciation can be charged using straight line method or declining balance method.Maximum amount of 179 expenses that Timberline may deduct in year 2019 is $1,020,000. Timberline’s carry forward of §179: Particular Amount Furniture $69,143 Computer equipment $24,800 Copier $12,800 Machinery 73,429 Total depreciation 180,172 Total depreciation is less than the actual net income therefore, Timberline will not carryforward any of amount. Maximum depreciation deduction assuming no bonus depreciation: Timberline can have maximum deduction of $10,000 in first year i.e. 2019. $16,000 and $9,600 for 2nd and 3rd year respectively.

Answered: a-1. What is the maximum amount of §179…

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Chapter1: Financial Statements And Business Decisions

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Assume that Timberline Corporation has 2019 taxable income of $274,000 for purposes of computing the §179 expense. It acquired the following assets in 2019: (Use MACRS)

	Purchase
Asset	Date		Basis
Furniture (7-year)	December 1	$	484,000
Computer equipment (5-year)	February 28		124,000
Copier (5-year)	July 15		64,000
Machinery (7-year)	May 22		514,000
Total		$	1,186,000

a-1. What is the maximum amount of §179 expense Timberline may deduct for 2019?
a-2. What is Timberline’s §179 carryforward to 2020, if any?
b. What would Timberline’s maximum depreciation deduction be for 2019 assuming no bonus depreciation? (Round your intermediate calculations to the nearest whole dollar amount.)

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