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Compute the maximum

Compute the maximum

FINANCIAL ACCOUNTING
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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b. Compute the maximum 2023 depreciation deductions, including §179 expense (ignoring bonus depreciation). Note: Round your final answers to nearest whole dollar. Description 2022 Assets Office furniture Machinery Used delivery truck 2023 Assets Computers and Information System Luxury Auto Assembly Equipment Storage Building Total Cost Section 179 Expense 0 $ 0 MACRS Basis O Current MACRS Depreciation $ O Total Cost Recovery Deduction $ 0 0 0 0 0 0 0 0
Transcribed Image Text:b. Compute the maximum 2023 depreciation deductions, including §179 expense (ignoring bonus depreciation). Note: Round your final answers to nearest whole dollar. Description 2022 Assets Office furniture Machinery Used delivery truck 2023 Assets Computers and Information System Luxury Auto Assembly Equipment Storage Building Total Cost Section 179 Expense 0 $ 0 MACRS Basis O Current MACRS Depreciation $ O Total Cost Recovery Deduction $ 0 0 0 0 0 0 0 0
Karane Enterprises, a calendar-year manufacturer based in College Station, Texas, began business in 2022. In the process of setting up the business, Karane has acquired various types of assets. Below is a list of assets acquired during 2022: Asset Office furniture Machinery Used delivery truck* Cost $ 170,000 1,564,000 44,000 Asset Date Placed in Service 02/03/2022 07/22/2022 08/17/2022 *Not considered a luxury automobile. During 2022, Karane was very successful (and had no §179 limitations) and decided to acquire more assets in 2023 to increase its production capacity. These are the assets acquired during 2023: Cost $ 404,000 81,000 Date Placed in Service 03/31/2023 05/26/2023 08/15/2023 11/13/2023 Computers and information system Luxury auto* Assembly equipment Storage building *Used 100% for business purposes. Karane generated taxable income in 2023 of $1,737,500 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. 1,220,000 900,000
Transcribed Image Text:Karane Enterprises, a calendar-year manufacturer based in College Station, Texas, began business in 2022. In the process of setting up the business, Karane has acquired various types of assets. Below is a list of assets acquired during 2022: Asset Office furniture Machinery Used delivery truck* Cost $ 170,000 1,564,000 44,000 Asset Date Placed in Service 02/03/2022 07/22/2022 08/17/2022 *Not considered a luxury automobile. During 2022, Karane was very successful (and had no §179 limitations) and decided to acquire more assets in 2023 to increase its production capacity. These are the assets acquired during 2023: Cost $ 404,000 81,000 Date Placed in Service 03/31/2023 05/26/2023 08/15/2023 11/13/2023 Computers and information system Luxury auto* Assembly equipment Storage building *Used 100% for business purposes. Karane generated taxable income in 2023 of $1,737,500 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. 1,220,000 900,000
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