Karane Enterprises, a calendar-year manufacturer based in College Station, Texas, began business in 2020. In the processof setting up the business, Karane has acquired various types of assets. Below is a list of assets acquired during 2020:Assetoffice furnitureMachineryCost$ 260,0001,582,00062,000Used delivery truck**Not considered a luxury automobile.Date Placed inService02/03/202007/22/202008/17/2020During 2020, Karane was very successful (and had no §179 limitations) and decided to acquire more assets in 2021 toincrease its production capacity. These are the assets acquired during 2021:AssetComputers and information systemLuxury autotAssembly equipmentStorage building†Used 100% for business purposes.Cost$ 422,00085,5001,310,000900,000Date Placed inService03/31/202105/26/202108/15/202111/13/2021Karane generated taxable income in 2021 of $1,760,000 for purposes of computing the $179 expense limitation.(Use MACRS Table 1, Table 2, Table 3, Table 4, Table 5, and Exhibit 10-10.) (Leave no answer blank. Enter zero ifapplicable. Input all the values as positive numbers.) Required:b. Compute the maximum 2021 depreciation deductions, including §179 expense (ignoring bonus depreciation).Description2020 AssetsOffice furnitureMachineryUsed delivery truck2021 AssetsComputers and Information SystemLuxury AutoAssembly EquipmentStorage BuildingTotalCostSection 179ExpenseMACRS BasisCurrentMACRSDepreciationTotal CostRecoveryDeduction

Section 179 expense refers to the deduction to the taxpayers on the cost of the ceratin properties…

Description 2020 Assets Office furniture Machinery Used delivery truck 2021 Assets Computers and Information System Luxury Auto Assembly Equipment Storage Building Cost Section 179 Expense MACRS Basis Current MACRS Depreciation Total Cost Recovery Deduction

Description 2020 Assets Office furniture Machinery Used delivery truck 2021 Assets Computers and Information System Luxury Auto Assembly Equipment Storage Building Cost Section 179 Expense MACRS Basis Current MACRS Depreciation Total Cost Recovery Deduction

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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Year 2016 Plant, Property, Equipment (Gross) Accumulated depreciation reported in 2020 Annual depreciation for 2020 year $710,000 $520,000 $50,000 Find the average remaining life of Plant, Property, Equipment (PPE). 21
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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