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 2021. In the process of setting up the business, Karane has acquired various types of assets. Below is a list of assets acquired during 2021: Cost Date Placed in Service Asset Office furniture Machinery Used delivery truck* $ 400,000 1,610,000 90,000 02/03/2021 07/22/2021 08/17/2021 *Not considered a luxury automobile. During 2021, Karane was very successful (and had no §179 limitations) and decided to acquire more assets in 2022 to Increase its production capacity. These are the assets acquired during 2022: Date Placed in Service Asset Computers and information system Cost $ 450,000 03/31/2022 Luxury auto* Assembly equipment Storage building 92,500 1,450,000 800,000 05/26/2022 08/15/2022 11/13/2022 *Used 100% for business purposes. Karane generated taxable Income in 2022 of $1,795,000 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: c. Compute the maximum 2022 depreciation deductions, including $179 expense, but now assume that Karane would like to take bonus depreciation. Description 2021 Assets Office Furniture Machinery Used Delivery Truck 2022 Assets Computers and Information System Luxury Auto Assembly Equipment Storage Building Total Cost Section 179 Expense Bonus MACRS Basis Current MACRS Depreciation $ 400,000 $ 0 $ 400,000 1,610,000 0 90,000 0 90,000 450,000 0 450,000 92,500 0 1,450,000 800,000 0 800,000 $ 4,892,500 $ 0 $ 0 $ 1,740,000 $ 0 Total Cost Recovery Deduction $ 0 0 0 0 0 oooo 0 0 19 $ 0
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 2021. In the process of setting up the business, Karane has acquired various types of assets. Below is a list of assets acquired during 2021: Cost Date Placed in Service Asset Office furniture Machinery Used delivery truck* $ 400,000 1,610,000 90,000 02/03/2021 07/22/2021 08/17/2021 *Not considered a luxury automobile. During 2021, Karane was very successful (and had no §179 limitations) and decided to acquire more assets in 2022 to Increase its production capacity. These are the assets acquired during 2022: Date Placed in Service Asset Computers and information system Cost $ 450,000 03/31/2022 Luxury auto* Assembly equipment Storage building 92,500 1,450,000 800,000 05/26/2022 08/15/2022 11/13/2022 *Used 100% for business purposes. Karane generated taxable Income in 2022 of $1,795,000 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: c. Compute the maximum 2022 depreciation deductions, including $179 expense, but now assume that Karane would like to take bonus depreciation. Description 2021 Assets Office Furniture Machinery Used Delivery Truck 2022 Assets Computers and Information System Luxury Auto Assembly Equipment Storage Building Total Cost Section 179 Expense Bonus MACRS Basis Current MACRS Depreciation $ 400,000 $ 0 $ 400,000 1,610,000 0 90,000 0 90,000 450,000 0 450,000 92,500 0 1,450,000 800,000 0 800,000 $ 4,892,500 $ 0 $ 0 $ 1,740,000 $ 0 Total Cost Recovery Deduction $ 0 0 0 0 0 oooo 0 0 19 $ 0
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
![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 2021. In the process
of setting up the business, Karane has acquired various types of assets. Below is a list of assets acquired during 2021:
Cost
Date Placed in
Service
Asset
Office furniture
Machinery
Used delivery truck*
$ 400,000
1,610,000
90,000
02/03/2021
07/22/2021
08/17/2021
*Not considered a luxury automobile.
During 2021, Karane was very successful (and had no §179 limitations) and decided to acquire more assets in 2022 to
Increase its production capacity. These are the assets acquired during 2022:
Date Placed in
Service
Asset
Computers and information system
Cost
$ 450,000
03/31/2022
Luxury auto*
Assembly equipment
Storage building
92,500
1,450,000
800,000
05/26/2022
08/15/2022
11/13/2022
*Used 100% for business purposes.
Karane generated taxable Income in 2022 of $1,795,000 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:
c. Compute the maximum 2022 depreciation deductions, including $179 expense, but now assume that Karane would like to take
bonus depreciation.
Description
2021 Assets
Office Furniture
Machinery
Used Delivery Truck
2022 Assets
Computers and Information System
Luxury Auto
Assembly Equipment
Storage Building
Total
Cost
Section 179
Expense
Bonus
MACRS Basis
Current
MACRS
Depreciation
$ 400,000
$
0
$
400,000
1,610,000
0
90,000
0
90,000
450,000
0
450,000
92,500
0
1,450,000
800,000
0
800,000
$ 4,892,500
$
0
$
0 $ 1,740,000 $
0
Total Cost
Recovery
Deduction
$
0
0
0
0
0
oooo
0
0
19
$
0](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F44fbf970-fc4a-43f2-89ba-6983fa63dbcb%2F3006e8d2-652a-4490-84fb-e59db2c2987a%2Fbtncy3_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 2021. In the process
of setting up the business, Karane has acquired various types of assets. Below is a list of assets acquired during 2021:
Cost
Date Placed in
Service
Asset
Office furniture
Machinery
Used delivery truck*
$ 400,000
1,610,000
90,000
02/03/2021
07/22/2021
08/17/2021
*Not considered a luxury automobile.
During 2021, Karane was very successful (and had no §179 limitations) and decided to acquire more assets in 2022 to
Increase its production capacity. These are the assets acquired during 2022:
Date Placed in
Service
Asset
Computers and information system
Cost
$ 450,000
03/31/2022
Luxury auto*
Assembly equipment
Storage building
92,500
1,450,000
800,000
05/26/2022
08/15/2022
11/13/2022
*Used 100% for business purposes.
Karane generated taxable Income in 2022 of $1,795,000 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:
c. Compute the maximum 2022 depreciation deductions, including $179 expense, but now assume that Karane would like to take
bonus depreciation.
Description
2021 Assets
Office Furniture
Machinery
Used Delivery Truck
2022 Assets
Computers and Information System
Luxury Auto
Assembly Equipment
Storage Building
Total
Cost
Section 179
Expense
Bonus
MACRS Basis
Current
MACRS
Depreciation
$ 400,000
$
0
$
400,000
1,610,000
0
90,000
0
90,000
450,000
0
450,000
92,500
0
1,450,000
800,000
0
800,000
$ 4,892,500
$
0
$
0 $ 1,740,000 $
0
Total Cost
Recovery
Deduction
$
0
0
0
0
0
oooo
0
0
19
$
0
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