Problem 1: Use the facts below to answer Problem 1 Questions 1-3Evergreen Corporation, a calendar year, accrual basis taxpayer, requires a new piece ofequipment for use in its manufacturing business. The company would like to determine whetherit would be cost beneficial to invest in the equipment and has asked you to help with some of thecalculations.The equipment will cost $100,000 and qualifies as a 3 year asset under the MACRSclassification. Evergreen will purchase the equipment on January 1, 2019, use the equipment for3 years, and sell it in October of 2021. Evergreen estimates that it could sell the equipment for$15,000 in 2021. Assume that bonus depreciation and the Sec. 179 expensing option are notavailable.Problem 1 Question 1: Calculate the total depreciation deductions Evergreen will take on theequipment for 2019, 2020, and 2021 assuming Evergreen sells the equipment in 2021.a. $68,520b. $85,185c. $90,739d. $92,590

Answered: Problem 1: Use the facts below to…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Problem J: On January 1, 2021, the Reddick Company purchased a mining right for P30,000,000. The mine's recoverable ore reserves are estimated to be 4,000,000 tons. Following the extraction of all ore, the company will be obligated by law to return the land to its original state. The present value of the restoration cost is P2,000,000. The company estimated that the property may be sold for P5,000,000. At a cost of P6,000,000, roads were built and other development costs were invested to aid in the extraction and transportation of the mined ore in early 2021. 200,000 tons of ore were extracted and sold in 2021. A new study conducted by a new mining engineer on December 31, 2022, revealed that 5,000,000 tons of ore were available for mining. 225,000 tons of ore were mined and sold in 2022. How much depletion expense should be recognized in 2022?
Please explain
in blasting and removing buildings, purchased and took delivery of a new c E10-8 On January 1, 2020, Murray Demolition, a Hamilton, Ontario, company specializing four years, at which time it should be able to be sold for $60,000. Murray Demoli- $140,000 plus HST on the truck, which is expected to be useful to the business for tion has always used the straight-line basis of calculating amortization. The new uses only the best and newest equipment on their worksites. The business spent truck to add to its growing fleet. Murray Demolition has a high-class reputation and dump owners want to see the amortization schedules for the straight-line, UOP. and D methods just to be sure this makes sense. The business expects the truck to he ful for 200,000 kilometres-60,000 kilometres in Year 1, 50,000 kilometres in eache Years 2 and 3, and 40,000 kilometres in Year 4. Is there a problem with continuing to use the straight-line method?
Vikram
A taxpayer places a $1,090,000 5-year recovery period asset in service in 2022. This is the only asset placed in service in 2022. Assuming half-year convention, an election to expense under Section 179, and no income limitation, what is the amount of total cost recovery deduction (no bonus depreciation)?
Question 14 of 15. Lorissa placed a rental in service on January 4, 2021. Her basis is $200,000 for the house only. On January 22, 2022, she replaced the furnace for $3,000. The January mid-month percentage is 3.485% for year 1 and 3.636% for year 2. What is the total amount of depreciation Lorissa will claim for 2022? $105 $7,272 $7,377 $7,381
Exercise 13-29 (Algorithmic) (10.3) Sebastian purchases two pieces of equipment for $147,000. Appraisals of the equipment indicate that the fair market value of the first piece of equipment is $102,900 and that of the second piece of equipment is $161,700. What is Sebastian's basis in these two assets? If required, round your interim calculations to two decimal places. Use rounded amounts in subsequent computations. If required, round final answers to the nearest dollar. Sebastian's basis for the first piece of equipment is X and I X for the second piece of equipment.
Question 4 On July 1, 2022, Pepperpot Company made a lump sum purchase of an office building, including the land and some fixtures, for cash of $550,000. The tax assessments for the past year reflected the following: Land, $48,000; Building, $168,000; and Fixtures, $24,000. Pepperpot believes they will use the building for another 20 years at which time they expect to sell it of $45,000. The fixtures only have a five year life and Pepperpot expects they will have a residual value of $2,000 when they are sold. Pepperpot depreciates their real estate holdings on a straight line basis. All fixtures are depreciated using declining balance method. a. b. c. Prepare the journal entry to record the acquisition. Show your work. Prepare any year end adjustments required. Show how the assets will be presented on the December 31, 2022 financial statements.
N1.
Jenny constructed a building for use as a residential rental property. The cost of the building was $164,976, and it was placed in service on August 1, 1998. The building has a 27.5-year MACRS life. What is the amount of depreciation on the building for 2020 for tax purposes? a.$6,547 b.$6,000 c.$3,000 d.$2,250 e.None of these choices are correct.
On March 13, 2022, Dr. Gerald Steinman acquired a dental practice for $1,200,000 cash. The market value of the equipment and fixtures he received was $650,000, and he assumed $ 80,000 in debt secured by the equipment. How much will Dr. Steinman's 2022 deductible amortization expense be for this acquisition? (Round answer to the nearest dollar) Group of answer choices $550,000 Not enough Information to determine $3,500 $0, because goodwill isn't amortized for tax purposes, but instead tested for impairment $35,000 $30, 555
Part I. IRS Publication 534 and Publication 946 Determine the amortization amount for the following case:Case 3: A pharmaceutical company is researching and testing a drug to control diabetes. After having invested $275,000 during 2017 as research expenses, the drug is produced. Point out what the company can do about amortization. Part II. IRS Publication 946 1.Establishes the requirements to be able to depreciate a property.2.Mentions the depreciation systems that can be used when filling out the contributions.

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