Assume that ACW Corporation has 2022 taxable income of $1,600,000 for purposes of computing the $179 expense. The company acquired the following assets during 2022 (assume no bonus depreciation): (Use MACRS Table 1, Table 2 and Table 5.) Asset Placed in Service Machinery 12-September Basis $ 480,000 Computer equipment Delivery truck 10-February 21-August Qualified real property (MACRS, 15 year, 150% DB) 2-April Total 80,000 103,000 1,390,000 $ 2,053,000 a. What is the maximum amount of $179 expense ACW may deduct for 2022? b. What is the maximum total depreciation that ACW may deduct in 2022 on the assets it placed in service in 2022? Note: Round your intermediate calculations and final answer to the nearest whole dollar amount. a. Maximum §179 expense for 2022 b. Maximum total deductible depreciation for 2022
Assume that ACW Corporation has 2022 taxable income of $1,600,000 for purposes of computing the $179 expense. The company acquired the following assets during 2022 (assume no bonus depreciation): (Use MACRS Table 1, Table 2 and Table 5.) Asset Placed in Service Machinery 12-September Basis $ 480,000 Computer equipment Delivery truck 10-February 21-August Qualified real property (MACRS, 15 year, 150% DB) 2-April Total 80,000 103,000 1,390,000 $ 2,053,000 a. What is the maximum amount of $179 expense ACW may deduct for 2022? b. What is the maximum total depreciation that ACW may deduct in 2022 on the assets it placed in service in 2022? Note: Round your intermediate calculations and final answer to the nearest whole dollar amount. a. Maximum §179 expense for 2022 b. Maximum total deductible depreciation for 2022
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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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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Transcribed Image Text:Assume that ACW Corporation has 2022 taxable income of $1,600,000 for purposes of computing the $179 expense. The company
acquired the following assets during 2022 (assume no bonus depreciation): (Use MACRS Table 1. Table 2 and Table 5.)
80,000
103,000
Asset
Machinery
Placed in Service
12-September
Basis
$ 480,000
Computer equipment
Delivery truck
10-February
21-August
Qualified real property (MACRS, 15
year, 150% DB)
2-April
Total
1,390,000
$ 2,053,000
a. What is the maximum amount of $179 expense ACW may deduct for 2022?
b. What is the maximum total depreciation that ACW may deduct in 2022 on the assets it placed in service in 2022?
Note: Round your intermediate calculations and final answer to the nearest whole dollar amount.
a. Maximum §179 expense for 2022
b. Maximum total deductible depreciation for 2022
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