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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: Date Placed in Asset Cost Service Office furnitures 150,000 02/03/2021 Machinery 1,560,000 07/22/2021 Used delivery truck* 40,000 08/17/2021 "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 Date Placed in Service $ 400,000 03/31/2022 80,000 05/26/2022 1,200,000 08/15/2022 700,000 11/13/2022 "Used 100% for business purposes. Karane generated taxable income in 2022 of $1,732,500 for purposes of computing the 5179 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.

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: Date Placed in Asset Cost Service Office furnitures 150,000 02/03/2021 Machinery 1,560,000 07/22/2021 Used delivery truck* 40,000 08/17/2021 "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 Date Placed in Service $ 400,000 03/31/2022 80,000 05/26/2022 1,200,000 08/15/2022 700,000 11/13/2022 "Used 100% for business purposes. Karane generated taxable income in 2022 of $1,732,500 for purposes of computing the 5179 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.

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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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: Date Placed in Asset Cost Service Office furnitures 150,000 02/03/2021 Machinery 1,560,000 07/22/2021 Used delivery truck* 40,000 08/17/2021 "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 Date Placed in Service $ 400,000 03/31/2022 80,000 05/26/2022 1,200,000 08/15/2022 700,000 11/13/2022 "Used 100% for business purposes. Karane generated taxable income in 2022 of $1,732,500 for purposes of computing the 5179 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. Required: b. Compute the maximum 2022 depreciation deductions, including $179 expense (ignoring bonus depreciation). Description Cost Section 179 Expense MACRS Basis Current MACRS Total Cost Recovery Depreciation Deduction 2021 Assets Office furniture $150,000 $ Machinery 1,560,000 0 $ 150,000 $ 36,735 $ 36,735 이 Used delivery truck 40,000 0 40,000 12,800 0 12,800 2022 Assets Computers and Information System 400,000 0 400,000 0 Luxury Auto 80,000 of 80,000 0 Assembly Equipment 1,200,000 0 Storage Building 700,000 0 700,000 2,247 2,247 $ $ Total $ 0 $ 4,130,000 1,370,000 51,782 $ 51,782
Transcribed Image Text: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: Date Placed in Asset Cost Service Office furnitures 150,000 02/03/2021 Machinery 1,560,000 07/22/2021 Used delivery truck* 40,000 08/17/2021 "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 Date Placed in Service $ 400,000 03/31/2022 80,000 05/26/2022 1,200,000 08/15/2022 700,000 11/13/2022 "Used 100% for business purposes. Karane generated taxable income in 2022 of $1,732,500 for purposes of computing the 5179 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. Required: b. Compute the maximum 2022 depreciation deductions, including $179 expense (ignoring bonus depreciation). Description Cost Section 179 Expense MACRS Basis Current MACRS Total Cost Recovery Depreciation Deduction 2021 Assets Office furniture $150,000 $ Machinery 1,560,000 0 $ 150,000 $ 36,735 $ 36,735 이 Used delivery truck 40,000 0 40,000 12,800 0 12,800 2022 Assets Computers and Information System 400,000 0 400,000 0 Luxury Auto 80,000 of 80,000 0 Assembly Equipment 1,200,000 0 Storage Building 700,000 0 700,000 2,247 2,247 $ $ Total $ 0 $ 4,130,000 1,370,000 51,782 $ 51,782
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