Karane Enterprises, a calendar-year manufacturer based in College Station, Texas, began business in 2022. In the process of setting up the business, Karane has acquired various types of assets. Below is a list of assets acquired during 2022: Date Asset Cost Placed in Service Office furnitures 150,000 02/03/2022 Machinery Used delivery 1,560,000 07/22/2022 40,000 08/17/2022 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: Asset Computers and information system Luxury auto* Assembly equipment Storage building Cost Date Placed in Service $ 400,000 03/31/2023 80,000 05/26/2023 1,200,000 08/15/2023 "Used 100% for business purposes. 700,000 11/13/2023 Karane generated taxable income in 2023 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.) Note: Leave no answer blank. Enter zero if applicable. Input all the values as positive numbers. Required: . Compute the maximum 2023 depreciation deductions, including $179 expense (ignoring bonus depreciation). Answer is not complete. Section Description Cost 179 Expense MACRS Basis Current MACRS Total Cost Recovery Depreciation Deduction 2022 Assets Office furniture $ 150,000 $ C$ 150,000 $ 36,735 S 36,735 Machinery Used delivery truck 1,560,000 40,000 0 40,000 12,800 12,800 2023 Assets Computers and 400,000 400,000 80,000 80,000 Information System Luxury Auto 80,000 80,000 0 Assembly Equipment 1,200,000 0 Storage Building 700,000 ✓ 700,000 $ Total 0 $ 2,247 131,782 2.247 $ 131,782 4,130,000 1,370,000
Karane Enterprises, a calendar-year manufacturer based in College Station, Texas, began business in 2022. In the process of setting up the business, Karane has acquired various types of assets. Below is a list of assets acquired during 2022: Date Asset Cost Placed in Service Office furnitures 150,000 02/03/2022 Machinery Used delivery 1,560,000 07/22/2022 40,000 08/17/2022 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: Asset Computers and information system Luxury auto* Assembly equipment Storage building Cost Date Placed in Service $ 400,000 03/31/2023 80,000 05/26/2023 1,200,000 08/15/2023 "Used 100% for business purposes. 700,000 11/13/2023 Karane generated taxable income in 2023 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.) Note: Leave no answer blank. Enter zero if applicable. Input all the values as positive numbers. Required: . Compute the maximum 2023 depreciation deductions, including $179 expense (ignoring bonus depreciation). Answer is not complete. Section Description Cost 179 Expense MACRS Basis Current MACRS Total Cost Recovery Depreciation Deduction 2022 Assets Office furniture $ 150,000 $ C$ 150,000 $ 36,735 S 36,735 Machinery Used delivery truck 1,560,000 40,000 0 40,000 12,800 12,800 2023 Assets Computers and 400,000 400,000 80,000 80,000 Information System Luxury Auto 80,000 80,000 0 Assembly Equipment 1,200,000 0 Storage Building 700,000 ✓ 700,000 $ Total 0 $ 2,247 131,782 2.247 $ 131,782 4,130,000 1,370,000
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Karane Enterprises, a calendar-year manufacturer based in College Station, Texas, began business in 2022.
In the process of setting up the business, Karane has acquired various types of assets. Below is a list of
assets acquired during 2022:
Date
Asset
Cost
Placed in
Service
Office furnitures 150,000 02/03/2022
Machinery
1,560,000
07/22/2022
Used delivery
truck*
40,000 08/17/2022
"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:
Asset
Computers and
information system
Luxury auto✶
Assembly equipment
Storage building
Cost
Date
Placed in
Service
$ 400,000 03/31/2023
80,000 05/26/2023
1,200,000 08/15/2023
"Used 100% for business purposes.
700,000 11/13/2023
Karane generated taxable income in 2023 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.)
Note: Leave no answer blank. Enter zero if applicable. Input all the values as positive numbers.
Required:
. Compute the maximum 2023 depreciation deductions, including $179 expense (ignoring bonus depreciation).
Answer is not complete.
Section
Description
Cost
179
Expense
MACRS
Basis
Current
MACRS
Depreciation
Total Cost
Recovery
Deduction
2022 Assets
Office furniture
$ 150,000 $
C$ 150,000 $ 36,735 S 36,735
Machinery
Used delivery truck
1,560,000
40,000
0
40,000
12,800
12,800
2023 Assets
Computers and
400,000
400,000
80,000
80,000
Information System
Luxury Auto
80,000
80,000
0
Assembly Equipment
1,200,000
0
Storage Building
700,000
700,000
2,247
2.247
$
Total
0
$
131,782
$ 131,782
4,130,000
1,370,000
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