3 of 5okIhtences!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 2022.In the process of setting up the business, Karane has acquired various types of assets. Below is a list ofassets acquired during 2022:AssetCostOffice furniture$ 350,000Machinery1,760,00080,000Used deliverytruck**Not considered a luxury automobile.During 2022, Karane was very successful (and had no §179 limitations) and decided to acquire more assetsin 2023 to increase its production capacity. These are the assets acquired during 2023:DescriptionDatePlaced inService02/03/202207/22/202208/17/2022AssetComputers andinformation systemLuxury auto*Assembly equipmentStorage building*Used 100% for business purposes.Karane generated taxable income in 2023 of $1,782,500 for purposes of computing the §179 expenselimitation. (Use MACRS Table 1, Table 2, Table 3, Table 4, Table 5, and Exhibit 10-10.)Note: Leave no answer blank. Enter zero if applicable. Input all the values as positive numbers.2022 AssetsOffice FurnitureMachineryUsed Delivery Truck2023 AssetsComputers and InformationSystemCost$ 440,00090,0001,400,000900,000Required:c. Compute the maximum 2023 depreciation deductions, including §179 expense, but now assume that Karane wouldlike to take bonus depreciation.Note: Round your final answers to nearest whole dollar.Luxury AutoAssembly EquipmentStorage BuildingTotalCostDatePlaced inService03/31/202305/26/202308/15/202311/13/2023Section179Expense$ 350,000 $1,760,00080,000or $00440,00090,0001,400,000 1,160,000900,000000Bonus$$5,020,000 1,160,000MACRSBasis000 $ 350,00000$ 85,715 $ 85,715680,000 166,532 166,53280,000 25,60025,60088,000Current Total CostMACRSRecoveryDepreciation Deduction$1,198,00012,200$ 290,047012,2001,160,0000$1,450,047

Cost Office furniture$ 350,000 Machinery 1,760,000 80,000 Asset Used delivery truck* 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: Asset Computers and information system Luxury auto* Assembly equipment Storage building *Used 100% for business purposes. Date Placed in Service 03/31/2023 Cost $ 440,000 90,000 05/26/2023 1,400,000 08/15/2023 900,000 11/13/2023

Cost Office furniture$ 350,000 Machinery 1,760,000 80,000 Asset Used delivery truck* 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: Asset Computers and information system Luxury auto Assembly equipment Storage building *Used 100% for business purposes. Date Placed in Service 03/31/2023 Cost $ 440,000 90,000 05/26/2023 1,400,000 08/15/2023 900,000 11/13/2023

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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Bilboa Freightlines, S.A., of Panama, has a small truck that it uses for intracity deliveries. The truck is worn out and must be either overhauled or replaced with a new truck. The company has assembled the following information: Purchase cost new Remaining book value Overhaul needed now Annual cash operating costs Salvage value-now Salvage value-five years from now Present Truck $ 25,000 $ 12,000 New Truck $ 31,000 $ 8,000 $ 13,000 $ 10,500 $ 6,000 $5,000 $ 6,000 If the company keeps and overhauls its present delivery truck, then the truck will be usable for five more years. If a new truck is purchased, it will be used for five years, after which it will be traded in on another truck. The new truck would be diesel-operated, resulting in a substantial reduction in annual operating costs, as shown above. The company computes depreciation on a straight-line basis. All investment projects are evaluated using a 14% discount rate. Click here to view Exhibit 78-1 and Exhibit 78-2. to…
2. The company is considering a project involving the purchase of new equipment. Change the data area of your worksheet to match the following: Use Exhibit 14B-1 and Exhibit 14B-2. (Use appropriate factor(s) from the tables provided.) A 1 Chapter 14: Applying Excel 2 3 Data 4 Example E 5 6 Working capital needed 7 Overhaul of equipment in four years 8 009 10 11 12 13 Cost of equipment needed Salvage value of the equipment in five years Annual revenues and costs: Sales revenues Cost of goods sold Out-of-pocket operating costs Discount rate Net present value S The internal rate of ratum is between $ $ and $ $ $ $ $ B 310,000 50,000 25,000 30,000 a. What is the net present value of the project? (Negative amount should be indicated by a minus sign. Round your present value factor to 3 decimals and round all other intermediate calculations to nearest whole dollar.) (1.734) c. The internal rate of return is between what two whole discount rates (e.g., between 10% and 11%, between 11% and 12…
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Asset Office furniture Machinery Used delivery truck* *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 $ 190,000 1,600,000 48,000 Description 2022 Assets Office furniture Machinery Used delivery truck 2023 Assets Asset Computers and information system Luxury auto* Assembly equipment Storage building *Used 100% for business purposes. Karane generated taxable income in 2023 of $1,742,500 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. Computers and Information System Luxury Auto Assembly Equipment Storage Building Total vate Placed in Service 02/03/2022 07/22/2022 08/17/2022 Required: b. Compute the maximum 2023 depreciation…
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Property, plant and equipment Ian has provided you with the details of the delivery trucks included in the PPE above, as summarised below: Delivery trucks Urban Swift Metro Mover Total $ $ At cost 114,000 85,000 199,000 Accumulated depreciation - 31 March 2023 (34,200) (4,250) (38,450) Carrying amount – 1 April 2023 79,800 80,750 160,550 Depreciation (11,400) (8,500) (19,900) Carrying amount – 31 March 2024 68,400 72,250 140,650 Remaining useful life as at 1 April 2024 6 years 8.5 years Urban Swift is a Ford F-150 four-door pickup truck with an open cargo at the rear. Ford Australia has stopped producing this model of vehicle and its resale value has improved given the constant demand for this type of truck. Metro Mover is an 18-wheeler truck used for long-distance transport on highways. Both the delivery trucks are depreciated at 10% on a straight-line basis. No acquisitions,…