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Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
H1.
Account
Transcribed Image Text:Required:
c. Compute the maximum 2021 depreciation deductions, including §179 expense, but now assume that Karane would like to take
bonus depreciation.
Description
2020 Assets
Office Furniture
Machinery
Used Delivery Truck
2021 Assets
Computers and Information System
Luxury Auto
Assembly Equipment
Storage Building
Total
GA
$
Cost
0
Section 179
Expense
$
0 $
Bonus
0
MACRS Basis
0
Current
MACRS
Depreciation
$
Total Cost
Recovery
Deduction
$
0 $
0
0
0
0
0
0
0
0
![Required information
[The following information applies to the questions displayed below.]
Karane Enterprises, a calendar-year manufacturer based in College Station, Texas, began business in 2020. In the process
of setting up the business, Karane has acquired various types of assets. Below is a list of assets acquired during 2020:
Asset
Office furniture
Machinery
Cost
$ 170,000
1,564,000
44,000
Used delivery truck*
*Not considered a luxury automobile.
Asset
During 2020, Karane was very successful (and had no §179 limitations) and decided to acquire more assets in 2021 to
increase its production capacity. These are the assets acquired during 2021:
Date Placed in
Service
02/03/2020
07/22/2020
08/17/2020
Computers and information system
Luxury autot
Assembly equipment
Storage building
Cost
$ 404,000
81,000
1,220,000
900,000
Date Placed in
Service
03/31/2021
05/26/2021
08/15/2021
11/13/2021
tUsed 100% for business purposes.
Karane generated taxable income in 2021 of $1,737,500 for purposes of computing the §179 expense limitation.
(Use MACRS Table 1, Table 2, Table 3, Table 4, Table 5, and Exhibit 10-10.) (Leave no answer blank. Enter zero if
applicable. Input all the values as positive numbers.)](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F0bbeec9f-c4d7-474e-9d3f-54b3d756ba9b%2F9ae2137a-026c-4065-a16d-ecb1020a6799%2Fjhc874a_processed.png&w=3840&q=75)
Transcribed Image Text:Required information
[The following information applies to the questions displayed below.]
Karane Enterprises, a calendar-year manufacturer based in College Station, Texas, began business in 2020. In the process
of setting up the business, Karane has acquired various types of assets. Below is a list of assets acquired during 2020:
Asset
Office furniture
Machinery
Cost
$ 170,000
1,564,000
44,000
Used delivery truck*
*Not considered a luxury automobile.
Asset
During 2020, Karane was very successful (and had no §179 limitations) and decided to acquire more assets in 2021 to
increase its production capacity. These are the assets acquired during 2021:
Date Placed in
Service
02/03/2020
07/22/2020
08/17/2020
Computers and information system
Luxury autot
Assembly equipment
Storage building
Cost
$ 404,000
81,000
1,220,000
900,000
Date Placed in
Service
03/31/2021
05/26/2021
08/15/2021
11/13/2021
tUsed 100% for business purposes.
Karane generated taxable income in 2021 of $1,737,500 for purposes of computing the §179 expense limitation.
(Use MACRS Table 1, Table 2, Table 3, Table 4, Table 5, and Exhibit 10-10.) (Leave no answer blank. Enter zero if
applicable. Input all the values as positive numbers.)
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