Assume that ACW Corporation has 2021 taxable income of $1,500,000 for purposes of computing the §179 expense. The company acquired the following assets during 2021 (assume no bonus depreciation): (Use MACRS Table 1, Table 2 and Table 5.) Asset Machinery Computer equipment Delivery truck Qualified improvement property Total Placed in Service September 12 February 10 August 21 April 2 Basis $ 470,000 70,000 93,000 a. Maximum §179 expense for 2021 b. Maximum total deductible depreciation for 2021 1,380,000 $ 2,013,000 a. What is the maximum amount of §179 expense ACW may deduct for 2021? b. What is the maximum total depreciation that ACW may deduct in 2021 on the assets it placed in service in 2021? (Round your intermediate calculations and final answer to the nearest whole dollar amount.)

Assume that ACW Corporation has 2021 taxable income of $1,500,000 for purposes of computing the §179 expense. The company acquired the following assets during 2021 (assume no bonus depreciation): (Use MACRS Table 1, Table 2 and Table 5.) Asset Machinery Computer equipment Delivery truck Qualified improvement property Total Placed in Service September 12 February 10 August 21 April 2 Basis $ 470,000 70,000 93,000 a. Maximum §179 expense for 2021 b. Maximum total deductible depreciation for 2021 1,380,000 $ 2,013,000 a. What is the maximum amount of §179 expense ACW may deduct for 2021? b. What is the maximum total depreciation that ACW may deduct in 2021 on the assets it placed in service in 2021? (Round your intermediate calculations and final answer to the nearest whole dollar amount.)

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FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Concept explainers

Depreciation Methods

The word "depreciation" is defined as an accounting method wherein the cost of tangible assets is spread over its useful life and it usually denotes how much of the assets value has been used up. The depreciation is usually considered as an operating expense. The main reason behind depreciation includes wear and tear of the assets, obsolescence etc.

Depreciation Accounting

In terms of accounting, with the passage of time the value of a fixed asset (like machinery, plants, furniture etc.) goes down over a specific period of time is known as depreciation. Now, the question comes in your mind, why the value of the fixed asset reduces over time.

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Question

Note:-

Do not provide handwritten solution. Maintain accuracy and quality in your answer. Take care of plagiarism.
Answer completely.
You will get up vote for sure.

Assume that ACW Corporation has 2021 taxable income of $1,500,000 for purposes of computing the §179 expense. The company
acquired the following assets during 2021 (assume no bonus depreciation): (Use MACRS Table 1, Table 2 and Table 5.)
Asset
Machinery
Computer equipment
Delivery truck
Qualified improvement property
Total
Placed in Service
September 12
February 10
August 21
April 2
Basis
$ 470,000
70,000
93,000
a. Maximum §179 expense for 2021
b. Maximum total deductible depreciation for 2021
1,380,000
$ 2,013,000
a. What is the maximum amount of §179 expense ACW may deduct for 2021?
b. What is the maximum total depreciation that ACW may deduct in 2021 on the assets it placed in service in 2021? (Round your
intermediate calculations and final answer to the nearest whole dollar amount.)

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Step 1: Introduction to §179 expense and MACRS depreciation

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Step 3: (b) Computation of maximum total deductible depreciation

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