Karane Enterprises, a calendar-year manufacturer based in College Station, Texas, began business in 2020. In the process of setting up the business, Karane has acquired various types of assets. Below is a list of assets acquired during 2020: Asset Office furniture Machinery Cost $ 150,000 1,560,000 40,000 Used delivery truck* *Not considered a luxury automobile. Asset Date Placed in Service 02/03/2020 07/22/2020 08/17/2020 During 2020, Karane was very successful (and had no §179 limitations) and decided to acquire more assets in 2021 to increase its production capacity. These are the assets acquired during 2021: Cost $ 400,000 80,000 Date Placed in Service 03/31/2021 Computers and information system Luxury autot Assembly equipment Storage building †Used 100% for business purposes. Karane generated taxable income in 2021 of $1,732,500 for purposes of computing the §179 expense limitation. (Use MACRS Table 1, Table 2, Table 3, Table 4, Table 5, and Exhibit 10-10) (Leave no answer blank. Enter zero if applicable. Input all the values as positive numbers.) 1,200,000 700,000 05/26/2021 08/15/2021 11/13/2021
Karane Enterprises, a calendar-year manufacturer based in College Station, Texas, began business in 2020. In the process of setting up the business, Karane has acquired various types of assets. Below is a list of assets acquired during 2020: Asset Office furniture Machinery Cost $ 150,000 1,560,000 40,000 Used delivery truck* *Not considered a luxury automobile. Asset Date Placed in Service 02/03/2020 07/22/2020 08/17/2020 During 2020, Karane was very successful (and had no §179 limitations) and decided to acquire more assets in 2021 to increase its production capacity. These are the assets acquired during 2021: Cost $ 400,000 80,000 Date Placed in Service 03/31/2021 Computers and information system Luxury autot Assembly equipment Storage building †Used 100% for business purposes. Karane generated taxable income in 2021 of $1,732,500 for purposes of computing the §179 expense limitation. (Use MACRS Table 1, Table 2, Table 3, Table 4, Table 5, and Exhibit 10-10) (Leave no answer blank. Enter zero if applicable. Input all the values as positive numbers.) 1,200,000 700,000 05/26/2021 08/15/2021 11/13/2021
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
answer in text form please (without image)
Transcribed Image Text:Required:
b. Compute the maximum 2021 depreciation deductions, including §179 expense (ignoring bonus depreciation).
Description
2020 Assets
Office furniture
Machinery
Used delivery truck
2021 Assets
Computers and Information
System
Luxury Auto
Assembly Equipment
Storage Building
Total
Answer is complete but not entirely correct.
Current
MACRS
Depreciation
Cost
$ 150,000 $
1,560,000✔
40,000✔
400,000✔
80,000✔
1,200,000✔
700,000✔
$ 4,130,000
Section
179
Expense
0 $
0✔
0
0✔
0✓
1,050,000 ✓
0✓
MACRS
Basis
150,000 $
560,000
40,000
400,000
80,000✔
150,000
700,000
› › › ›
$ 1,050,000 $ 2,080,000
$
36,735 $ 36,735
80,024 X
80,024
12,800✔
12,800
80,000✔
10,000 X
21,435✓
2,247✔
Total Cost
Recovery
Deduction
243,241
80,000
10,000
1,071,435
2,247
$ 1,293,241
Transcribed Image Text:Karane Enterprises, a calendar-year manufacturer based in College Station, Texas, began business in 2020. In the process
of setting up the business, Karane has acquired various types of assets. Below is a list of assets acquired during 2020:
Asset
Office furniture
Machinery
Cost
$ 150,000
1,560,000
40,000
Used delivery truck*
*Not considered a luxury automobile.
Asset
Date Placed in
Service
02/03/2020
07/22/2020
08/17/2020
During 2020, Karane was very successful (and had no §179 limitations) and decided to acquire more assets in 2021 to
increase its production capacity. These are the assets acquired during 2021:
Cost
$ 400,000
80,000
Date Placed in
Service
03/31/2021
05/26/2021
Computers and information system
Luxury autot
Assembly equipment
Storage building
tUsed 100% for business purposes.
Karane generated taxable income in 2021 of $1,732,500 for purposes of computing the §179 expense limitation.
(Use MACRS Table 1, Table 2, Table 3, Table 4, Table 5, and Exhibit 10-10) (Leave no answer blank. Enter zero if
applicable. Input all the values as positive numbers.)
1,200,000
700,000
08/15/2021
11/13/2021
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