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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: Cost $ 150,000 1,560,000 40,000 Date Placed in Service 02/03/2022 07/22/2022 08/17/2022 Asset Office furniture Machinery Used delivery 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 *Used 100% for business purposes. Cost $ 400,000 80,000 1,200,000 700,000 Date Placed in Service 03/31/2023 05/26/2023 08/15/2023 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 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: Cost $ 150,000 1,560,000 40,000 Date Placed in Service 02/03/2022 07/22/2022 08/17/2022 Asset Office furniture Machinery Used delivery 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 *Used 100% for business purposes. Cost $ 400,000 80,000 1,200,000 700,000 Date Placed in Service 03/31/2023 05/26/2023 08/15/2023 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.

FINANCIAL ACCOUNTING
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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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: Asset Office furniture Machinery Used delivery 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: Cost $ 150,000 1,560,000 40,000 Date Placed in Service 02/03/2022 07/22/2022 08/17/2022 Asset Computers and information system Luxury auto* Assembly equipment Storage building *Used 100% for business purposes. Cost $ 400,000 80,000 1,200,000 700,000 Date Placed in Service 03/31/2023 05/26/2023 08/15/2023 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.
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: Asset Office furniture Machinery Used delivery 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: Cost $ 150,000 1,560,000 40,000 Date Placed in Service 02/03/2022 07/22/2022 08/17/2022 Asset Computers and information system Luxury auto* Assembly equipment Storage building *Used 100% for business purposes. Cost $ 400,000 80,000 1,200,000 700,000 Date Placed in Service 03/31/2023 05/26/2023 08/15/2023 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: b. Compute the maximum 2023 depreciation deductions, including §179 expense (ignoring bonus depreciation). Description 2022 Assets Office furniture Machinery Used delivery truck 2023 Assets Computers and Information System Luxury Auto Assembly Equipment Storage Building Total Cost $ 150,000 $ 1,560,000 40,000 400,000 80,000 1,200,000 700,000 $ 4,130,000 Answer is not complete. Section 179 Expense 0 $ 150,000 0 540,000 40,000 0 >> >> MACRS Basis 400,000 80,000 160,000 X 700,000 $ 1,040,000 $ 2,070,000 1,040,000 X Current MACRS Depreciation $ Total Cost Recovery Deduction 36,735 $ 132,246 X 12,800 80,000 10,100 X 22,864 2,247 $ 296,992 36,735 132,246 12,800 80,000 10,100 1,062,864 2,247 $ 1,336,992
Transcribed Image Text:Required: b. Compute the maximum 2023 depreciation deductions, including §179 expense (ignoring bonus depreciation). Description 2022 Assets Office furniture Machinery Used delivery truck 2023 Assets Computers and Information System Luxury Auto Assembly Equipment Storage Building Total Cost $ 150,000 $ 1,560,000 40,000 400,000 80,000 1,200,000 700,000 $ 4,130,000 Answer is not complete. Section 179 Expense 0 $ 150,000 0 540,000 40,000 0 >> >> MACRS Basis 400,000 80,000 160,000 X 700,000 $ 1,040,000 $ 2,070,000 1,040,000 X Current MACRS Depreciation $ Total Cost Recovery Deduction 36,735 $ 132,246 X 12,800 80,000 10,100 X 22,864 2,247 $ 296,992 36,735 132,246 12,800 80,000 10,100 1,062,864 2,247 $ 1,336,992
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