See Figure 1See Figure 2As typical of a start-up business, PNW, LLC expects to generate a current year loss with regular deprecation. As such, PNW, LLC does not elect Section 179 depreciation and elects out of bonus depreciation. PNW, LLC qualifies for the half year convention.1) How much depreciation is reported by Philadelphia Region 3 on assets purchased from Magellanic Resources?2) How much depreciation is reported by Kansas City Region 7 on assets purchased from Magellanic Resources?3) What asset class life was used by Kansas City Region 7 on assets purchased from Magellanic Resources?4) Did Kansas City Region 7 under or over report depreciation on assets purchased from Magellanic Resources?5) What is the correct depreciation for Kansas City Region 7 on assets purchased from Magellanic Resources? SupplierPenguin Network Warehouses, LLCMACRS Depreciation Year 1V (AlI)V Emperor Office Furn..V Gentoo RefrigerationV Magellanic RescurcesRegional Office$2,000,000$1,800,000S1,600,000$1,400,000$1,200,000Regional OfficeV (All)V Atlanta$1,000,000$800,000V BostonV ChicagoV DallasV DenverV Kansas CityV New York CityV PhiladelphiaV San FranciscoV Seattle$600,000$400,000$200,000$0*+ ableauMACRS Tax Depreciation Year 1New York CityPhiladelphiaSan Francisco Penguin Network Warehouses, LLC ("PNW, LLC") is a start-up warehousing and logistics company providing grocery stores withclimate-controlled storage and just-in-time delivery of perishable goods nationwide. PNW, LLC has 10 Regional Offices with theCorporate Headquarters being in Region 5, Chicago. Each Regional Office makes tangible personal property purchases based on theneeds of each location and performs the data entry exercise of entering the purchase information into a central system for fixed assettracking and depreciation purposes.Corporate has negotiated bulk pricing arrangements with its primary suppliers. Each Regional Office purchases the similar tangiblepersonal property from three primary suppliers as follows:Gentoo Refrigeration – supplier of commercial cooling machinery and equipmentMagellanic Resources – supplier of computers and peripheral equipment used to manage logisticsEmperor Office Furniture – supplier of office furniture and fixturesMs. Humboldt, the Corporate Tax Analyst, has exported the data from the central system and has created the following Tableauvisualization.SupplierPenguin Network Warehouses, LLCV (AlI)V Emperor Office Furn...V Gentoo RefrigerationV Magellanic ResourcesMACRS Depreciation Year 1Regional Office$2,000,000$1,800,000$1,600,000

A taxpayer may elect to expense the cost of any section 179 property and deduct it in the year the…

Answered: As typical of a start-up business, PNW,…

FINANCIAL ACCOUNTING

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As typical of a start-up business, PNW, LLC expects to generate a current year loss with regular deprecation. As such, PNW, LLC does not elect Section 179 depreciation and elects out of bonus depreciation. PNW, LLC qualifies for the half year convention.

1) How much depreciation is reported by Philadelphia Region 3 on assets purchased from Magellanic Resources?

2) How much depreciation is reported by Kansas City Region 7 on assets purchased from Magellanic Resources?

3) What asset class life was used by Kansas City Region 7 on assets purchased from Magellanic Resources?

4) Did Kansas City Region 7 under or over report depreciation on assets purchased from Magellanic Resources?

5) What is the correct depreciation for Kansas City Region 7 on assets purchased from Magellanic Resources?

Supplier
Penguin Network Warehouses, LLC
MACRS Depreciation Year 1
V (AlI)
V Emperor Office Furn..
V Gentoo Refrigeration
V Magellanic Rescurces
Regional Office
$2,000,000
$1,800,000
S1,600,000
$1,400,000
$1,200,000
Regional Office
V (All)
V Atlanta
$1,000,000
$800,000
V Boston
V Chicago
V Dallas
V Denver
V Kansas City
V New York City
V Philadelphia
V San Francisco
V Seattle
$600,000
$400,000
$200,000
$0
*+ ableau
MACRS Tax Depreciation Year 1
New York City
Philadelphia
San Francisco

Penguin Network Warehouses, LLC ("PNW, LLC") is a start-up warehousing and logistics company providing grocery stores with
climate-controlled storage and just-in-time delivery of perishable goods nationwide. PNW, LLC has 10 Regional Offices with the
Corporate Headquarters being in Region 5, Chicago. Each Regional Office makes tangible personal property purchases based on the
needs of each location and performs the data entry exercise of entering the purchase information into a central system for fixed asset
tracking and depreciation purposes.
Corporate has negotiated bulk pricing arrangements with its primary suppliers. Each Regional Office purchases the similar tangible
personal property from three primary suppliers as follows:
Gentoo Refrigeration – supplier of commercial cooling machinery and equipment
Magellanic Resources – supplier of computers and peripheral equipment used to manage logistics
Emperor Office Furniture – supplier of office furniture and fixtures
Ms. Humboldt, the Corporate Tax Analyst, has exported the data from the central system and has created the following Tableau
visualization.
Supplier
Penguin Network Warehouses, LLC
V (AlI)
V Emperor Office Furn...
V Gentoo Refrigeration
V Magellanic Resources
MACRS Depreciation Year 1
Regional Office
$2,000,000
$1,800,000
$1,600,000

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