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: Cast Date Placed in Asset Office furniture Machinery Used delivery trucks Service $ 370,000 1,604,000 84,000 02/03/2021 07/22/2021 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: Date Placed in Asset Computers and information system Luxury auto⭑ Assembly equipment Storage building *Used 100% for business purposes. Cost $ 444,000 Service 03/31/2022 91,000 1,420,000 05/26/2022 08/15/2022 800,000 11/13/2022 Karane generated taxable income in 2022 of $1,787,500 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. Required: c. Compute the maximum 2022 depreciation deductions, including $179 expense, but now assume that Karane would like to take bonus depreciation. Description 2021 Assets Office Furniture Machinery Used Delivery Truck 2022 Assets Computers and Information System Luxury Auto Assembly Equipment Storage Building Total Cost Section 179 Expense Bonus MACRS Basis Current MACRS Depreciation Total Cost Recovery Deduction $ 0 0 0 D p 0 D $ 0 $ $ 0 $ 0 $ 0 $ 0
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: Cast Date Placed in Asset Office furniture Machinery Used delivery trucks Service $ 370,000 1,604,000 84,000 02/03/2021 07/22/2021 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: Date Placed in Asset Computers and information system Luxury auto⭑ Assembly equipment Storage building *Used 100% for business purposes. Cost $ 444,000 Service 03/31/2022 91,000 1,420,000 05/26/2022 08/15/2022 800,000 11/13/2022 Karane generated taxable income in 2022 of $1,787,500 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. Required: c. Compute the maximum 2022 depreciation deductions, including $179 expense, but now assume that Karane would like to take bonus depreciation. Description 2021 Assets Office Furniture Machinery Used Delivery Truck 2022 Assets Computers and Information System Luxury Auto Assembly Equipment Storage Building Total Cost Section 179 Expense Bonus MACRS Basis Current MACRS Depreciation Total Cost Recovery Deduction $ 0 0 0 D p 0 D $ 0 $ $ 0 $ 0 $ 0 $ 0
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
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:
Cost
Date Placed in
Service
Asset
Office furniture
Machinery
Used delivery trucks
02/03/2021
$ 370,000
1,604,000
84,000
07/22/2021
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:
Computers and information system
Asset
Luxury auto*
Assembly equipment
Storage building
*Used 100% for business purposes.
Date Placed in
Service
03/31/2022
Cost
$ 444,000
91,000
1,420,000
800,000
05/26/2022
08/15/2022
11/13/2022
Karane generated taxable income in 2022 of $1,787,500 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.
Required:
c. Compute the maximum 2022 depreciation deductions, including $179 expense, but now assume that Karane would like to take
bonus depreciation.
Description
2021 Assets
Office Furniture
Machinery
Used Delivery Truck
2022 Assets
Computers and Information System
Luxury Auto
Assembly Equipment
Storage Building
Total
Cost
Section 179
Expense
Bonus
MACRS Basis
Current
MACRS
Depreciation
Total Cost
Recovery
Deduction
S
0
0
0
D
D
D
0
$
$
$
0
$
0
$
0
S
0
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