Please solve all (a,b,c,d,e) questions given below based on the images uploaded. As typical of a start-up business, PNW, LLC expects to generate a current year loss with regular deprecation. As such, PNW, LLC does not elect Section 179 depreciation and elects out of bonus depreciation. PNW, LLC qualifies for the half year convention. a. How much depreciation is reported by Philadelphia Region 3 on assets purchased from Magellanic Resources? b.How much depreciation is reported by Kansas City Region 7 on assets purchased from Magellanic Resources? c.What asset class life was used by Kansas City Region 7 on assets purchased from Magellanic Resources? d. Did Kansas City Region 7 under or over report depreciation on assets purchased from Magellanic Resources? e.What is the correct depreciation for Kansas City Region 7 on assets purchased from Magellanic Resources?
Depreciation Methods
The word "depreciation" is defined as an accounting method wherein the cost of tangible assets is spread over its useful life and it usually denotes how much of the assets value has been used up. The depreciation is usually considered as an operating expense. The main reason behind depreciation includes wear and tear of the assets, obsolescence etc.
Depreciation Accounting
In terms of accounting, with the passage of time the value of a fixed asset (like machinery, plants, furniture etc.) goes down over a specific period of time is known as depreciation. Now, the question comes in your mind, why the value of the fixed asset reduces over time.
Please solve all (a,b,c,d,e) questions given below based on the images uploaded.
As typical of a start-up business, PNW, LLC expects to generate a current year loss with regular deprecation. As such, PNW, LLC does not elect Section 179
a. How much depreciation is reported by Philadelphia Region 3 on assets purchased from Magellanic Resources?
b.How much depreciation is reported by Kansas City Region 7 on assets purchased from Magellanic Resources?
c.What asset class life was used by Kansas City Region 7 on assets purchased from Magellanic Resources?
d. Did Kansas City Region 7 under or over report depreciation on assets purchased from Magellanic Resources?
e.What is the correct depreciation for Kansas City Region 7 on assets purchased from Magellanic Resources?
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