Käräne Enterprises, a
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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![Required Information
[The following information applies to the questions displayed below.]
Karane Enterprises, a calendar-year manufacturer based in College Station, Texas, began business in 2018. In the process
of setting up the business, Karane has acquired various types of assets. Below is a list of assets acquired during 2018:
Office furniture
Machinery
Used delivery truck*
*Not considered a luxury automobile.
During 2018, Karane was very successful (and had no §179 limitations) and decided to acquire more assets in 2019 to
Increase its production capacity. These are the assets acquired during 2019:
Asset
Computers & info. system
Luxury autot
Assembly equipment
Storage building
Asset
Description
2018 Assets
Office furniture
Machinery
Used delivery truck
Totals
2019 Assets
Computers & Info. System
Luxury Auto
Assembly Equipment
Storage Building
Cost
$ 150,000
1,560,000
40,000
tUsed 100% for business purposes.
Karane generated taxable income in 2019 of $1,732,500 for purposes of computing the $179 expense. (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.)
b. Compute the maximum 2019 depreciation deductions, including §179 expense (ignoring bonus depreciation).
Cost
400,000
80,000
1,200,000
700,000
Cost
$
Date Placed in
Service
02/03/2018
07/22/2018
08/17/2018
Date Placed in
Service
03/31/2019
05/26/2019
08/15/2019
11/13/2019
Sec. 179
Expense
MACRS Basis
Current MACRS
Depreciation
Total
Depreciation
Deduction](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F0370f9f3-a77a-4da8-a39c-6d383ad5f73e%2Fecfb9007-8301-44f9-b264-15c02f891ebf%2Fs2ey0yj_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Required Information
[The following information applies to the questions displayed below.]
Karane Enterprises, a calendar-year manufacturer based in College Station, Texas, began business in 2018. In the process
of setting up the business, Karane has acquired various types of assets. Below is a list of assets acquired during 2018:
Office furniture
Machinery
Used delivery truck*
*Not considered a luxury automobile.
During 2018, Karane was very successful (and had no §179 limitations) and decided to acquire more assets in 2019 to
Increase its production capacity. These are the assets acquired during 2019:
Asset
Computers & info. system
Luxury autot
Assembly equipment
Storage building
Asset
Description
2018 Assets
Office furniture
Machinery
Used delivery truck
Totals
2019 Assets
Computers & Info. System
Luxury Auto
Assembly Equipment
Storage Building
Cost
$ 150,000
1,560,000
40,000
tUsed 100% for business purposes.
Karane generated taxable income in 2019 of $1,732,500 for purposes of computing the $179 expense. (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.)
b. Compute the maximum 2019 depreciation deductions, including §179 expense (ignoring bonus depreciation).
Cost
400,000
80,000
1,200,000
700,000
Cost
$
Date Placed in
Service
02/03/2018
07/22/2018
08/17/2018
Date Placed in
Service
03/31/2019
05/26/2019
08/15/2019
11/13/2019
Sec. 179
Expense
MACRS Basis
Current MACRS
Depreciation
Total
Depreciation
Deduction
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