Asset Cost Date Placed in Service Office furniture Machinery Used delivery truck" $ 230,000 02/03/2021 1,576,000 07/22/2021 56,000 08/17/2021 ot considered a luxury automobile. uring 2021, Karane was very successful (and had no §179 limitations) and crease its production capacity. These are the assets acquired during 202 Date Placed in Asset Computers and information system Cost $ 416,000 Service 03/31/2022 Luxury auto Assembly equipment 84,000 1,280,000 05/26/2022 08/15/2022 Storage building 900,000 11/13/2022
Asset Cost Date Placed in Service Office furniture Machinery Used delivery truck" $ 230,000 02/03/2021 1,576,000 07/22/2021 56,000 08/17/2021 ot considered a luxury automobile. uring 2021, Karane was very successful (and had no §179 limitations) and crease its production capacity. These are the assets acquired during 202 Date Placed in Asset Computers and information system Cost $ 416,000 Service 03/31/2022 Luxury auto Assembly equipment 84,000 1,280,000 05/26/2022 08/15/2022 Storage building 900,000 11/13/2022
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
Munabhai
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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 2021. In the process
of setting up the business, Karane has acquired various types of assets. Below is a list of assets acquired during 2021:
Asset
Office furniture
Machinery
Used delivery truck*
Cost
$ 230,000
1,576,000
56,000
*Not considered a luxury automobile.
Date Placed in
Service
02/03/2021
07/22/2021
08/17/2021
During 2021, Karane was very successful (and had no §179 limitations) and decided to acquire more assets in 2022 to
increase its production capacity. These are the assets acquired during 2022:
Asset
Computers and information system
Luxury auto*
Assembly equipment
Storage building
Cost
$ 416,000
Date Placed in
Service
03/31/2022
84,000
1,280,000
900,000
05/26/2022
08/15/2022
11/13/2022
*Used 100% for business purposes.
Karane generated taxable income in 2022 of $1,752,500 for purposes of computing the $179 expense limitation. (Use
MACRS Table 1, Table 2, Table 3, Table 4, Table 5, and Exhibit 10-10.)
Note: Leave no answer blank. Enter zero if applicable. Input all the values as positive numbers.
Required:
b. Compute the maximum 2022 depreciation deductions, including $179 expense (ignoring bonus depreciation).
Description
2021 Assets
Office furniture
Machinery
Used delivery truck
2022 Assets
Computers and Information System
Luxury Auto
Assembly Equipment
Storage Building
Total
Cost
Section 179
Expense
MACRS Basis
Current
MACRS
Depreciation
Total Cost
Recovery
Deduction
$ 230,000 $
0 $ 230,000
$
0
0
0
0
0
0
0
$
230,000 $
0 $ 230,000 $
0 $
0](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fa56ff5d8-ee11-4d43-8e9c-42b824f6a0f4%2Fdc14de54-f57e-48e8-b249-60a7cb357957%2F8iwlw0r_processed.jpeg&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 2021. In the process
of setting up the business, Karane has acquired various types of assets. Below is a list of assets acquired during 2021:
Asset
Office furniture
Machinery
Used delivery truck*
Cost
$ 230,000
1,576,000
56,000
*Not considered a luxury automobile.
Date Placed in
Service
02/03/2021
07/22/2021
08/17/2021
During 2021, Karane was very successful (and had no §179 limitations) and decided to acquire more assets in 2022 to
increase its production capacity. These are the assets acquired during 2022:
Asset
Computers and information system
Luxury auto*
Assembly equipment
Storage building
Cost
$ 416,000
Date Placed in
Service
03/31/2022
84,000
1,280,000
900,000
05/26/2022
08/15/2022
11/13/2022
*Used 100% for business purposes.
Karane generated taxable income in 2022 of $1,752,500 for purposes of computing the $179 expense limitation. (Use
MACRS Table 1, Table 2, Table 3, Table 4, Table 5, and Exhibit 10-10.)
Note: Leave no answer blank. Enter zero if applicable. Input all the values as positive numbers.
Required:
b. Compute the maximum 2022 depreciation deductions, including $179 expense (ignoring bonus depreciation).
Description
2021 Assets
Office furniture
Machinery
Used delivery truck
2022 Assets
Computers and Information System
Luxury Auto
Assembly Equipment
Storage Building
Total
Cost
Section 179
Expense
MACRS Basis
Current
MACRS
Depreciation
Total Cost
Recovery
Deduction
$ 230,000 $
0 $ 230,000
$
0
0
0
0
0
0
0
$
230,000 $
0 $ 230,000 $
0 $
0
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