Required: Compute the maximum 2022 depreciation deductions, including §179 expense (ignoring bonus depreciation). Note: Apply the $179 deduction to the most expensive eligible asset first. Round your final answers to nearest whole dollar.
Required: Compute the maximum 2022 depreciation deductions, including §179 expense (ignoring bonus depreciation). Note: Apply the $179 deduction to the most expensive eligible asset first. Round your final answers to nearest whole dollar.
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 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 Placed in
Asset
Office furniture
Machinery
Used delivery truck*
Cost
$ 240,000
1,650,000
58,000
Service
02/03/2022
07/22/2022
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:
Date Placed in
Service
Asset
Computers and information system
Cost
$ 418,000
03/31/2023
Luxury auto*
Assembly equipment
Storage building
84,500
1,290,000
700,000
05/26/2023
08/15/2023
11/13/2023
*Used 100% for business purposes.
Karane generated taxable income in 2023 of $1,755,000 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 2022 depreciation deductions, including §179 expense (ignoring bonus depreciation).
Note: Apply the $179 deduction to the most expensive eligible asset first. Round your final answers to nearest whole dollar.
Answer is not complete.
Description
Cost
§179
Expense
MACRS
Basis
Current
MACRS
Total Cost
Recovery
Depreciation
Deduction
Office furniture
Machinery
Used delivery truck
Total
$
240,000
$
0 $
240,000
$
0
1,650,000 ✓
0
58,000
58,000 ✓
0
$ 1,948,000
SA
$
298,000
$
0
$
0](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F07a2d07f-b271-4bd2-9e8a-ce7f098111e8%2Fcacdea86-7719-43f0-a7c6-d9f1264502ef%2Fgej72xp_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 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 Placed in
Asset
Office furniture
Machinery
Used delivery truck*
Cost
$ 240,000
1,650,000
58,000
Service
02/03/2022
07/22/2022
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:
Date Placed in
Service
Asset
Computers and information system
Cost
$ 418,000
03/31/2023
Luxury auto*
Assembly equipment
Storage building
84,500
1,290,000
700,000
05/26/2023
08/15/2023
11/13/2023
*Used 100% for business purposes.
Karane generated taxable income in 2023 of $1,755,000 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 2022 depreciation deductions, including §179 expense (ignoring bonus depreciation).
Note: Apply the $179 deduction to the most expensive eligible asset first. Round your final answers to nearest whole dollar.
Answer is not complete.
Description
Cost
§179
Expense
MACRS
Basis
Current
MACRS
Total Cost
Recovery
Depreciation
Deduction
Office furniture
Machinery
Used delivery truck
Total
$
240,000
$
0 $
240,000
$
0
1,650,000 ✓
0
58,000
58,000 ✓
0
$ 1,948,000
SA
$
298,000
$
0
$
0
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