Compute the maximum 2022 depreciation deductions, including §179 expense (ignoring bonus depreciation).
Compute the maximum 2022 depreciation deductions, including §179 expense (ignoring bonus depreciation).
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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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*
*Not considered a luxury automobile.
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
$ 280,000
1,586,000
66,000
Description
2021 Assets
Office furniture
Machinery
Used delivery truck
2022 Assets
Date Placed
in Service
02/03/2021
07/22/2021
08/17/2021
Computers and Information System
Luxury Auto
Assembly Equipment
Storage Building
Total
*Used 100% for business purposes.
Karane generated taxable income in 2022 of $1,765,000 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.
Cost
$ 426,000
86,500
1,330,000
800,000
Required:
b. Compute the maximum 2022 depreciation deductions, including §179 expense (ignoring bonus depreciation).
Cost
Date Placed
in Service
03/31/2022
05/26/2022
08/15/2022
11/13/2022
Section 179
Expense
MACRS Basis
Current
MACRS
Depreciation
Total Cost
Recovery
Deduction](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fa454c8d9-8113-4596-aba6-6b9ead294dd4%2F869336bd-4bc8-4794-b715-56dc6b0b6d32%2Fd1y4t_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 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*
*Not considered a luxury automobile.
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
$ 280,000
1,586,000
66,000
Description
2021 Assets
Office furniture
Machinery
Used delivery truck
2022 Assets
Date Placed
in Service
02/03/2021
07/22/2021
08/17/2021
Computers and Information System
Luxury Auto
Assembly Equipment
Storage Building
Total
*Used 100% for business purposes.
Karane generated taxable income in 2022 of $1,765,000 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.
Cost
$ 426,000
86,500
1,330,000
800,000
Required:
b. Compute the maximum 2022 depreciation deductions, including §179 expense (ignoring bonus depreciation).
Cost
Date Placed
in Service
03/31/2022
05/26/2022
08/15/2022
11/13/2022
Section 179
Expense
MACRS Basis
Current
MACRS
Depreciation
Total Cost
Recovery
Deduction
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