Dain's Diamond Bit Drilling purchased the following assets this year. Assume its taxable income for the year was $53,000 before deducting any $179 expense (assume no bonus depreciation). Asset Purchase Date Original Basis $ 90,000 January 25 July 25 April 22 Drill bits (5-year) Drill bits (5-yoar) Commercial building 95,000 220,000 a) What is the maximum amount of $179 expense Dain may deduct for the year? b) What is Dain's maximum depreciation expense for the year (including $179 expense)? c) If the January drill bits' original basis was $2,375,000, what is the maximum amount of $179 expense Dain may deduct for the year? d) If the January drill bits' basis was $2,495,000, what is the maximum amount of $179 expense Dain may deduct for the year?

Dain's Diamond Bit Drilling purchased the following assets this year. Assume its taxable income for the year was $53,000 before deducting any $179 expense (assume no bonus depreciation). Asset Purchase Date Original Basis $ 90,000 January 25 July 25 April 22 Drill bits (5-year) Drill bits (5-yoar) Commercial building 95,000 220,000 a) What is the maximum amount of $179 expense Dain may deduct for the year? b) What is Dain's maximum depreciation expense for the year (including $179 expense)? c) If the January drill bits' original basis was $2,375,000, what is the maximum amount of $179 expense Dain may deduct for the year? d) If the January drill bits' basis was $2,495,000, what is the maximum amount of $179 expense Dain may deduct for the year?

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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