During 2020, William purchases the following capital assets for use in his catering business:New passenger automobile (September 30)$53,400Baking equipment (June 30)16,020Assume that William decides to use the election to expense on the baking equipment (and has adequate taxable income to cover the deduction) but not on the automobile (which has a 5-year recovery period), and he also usesthe MACRS accelerated method to calculate depreciation but elects out of bonus depreciation. Assume he has adequate taxable income.Click here to access the depreciation table and click here to access the annual automobile depreciation limitations.Calculate William's maximum depreciation deduction for 2020, assuming he uses the automobile 100 percent in his business.X

MACRS Method - The full form of MACRS is Modified Accelerated Cost Recovery System. It is a…

Villiam decides to use the election to expense on the baking equipment (and has ade celerated method to calculate depreciation but elects out of bonus depreciation. Ass access the depreciation table and click here to access the annual automobi

Villiam decides to use the election to expense on the baking equipment (and has ade celerated method to calculate depreciation but elects out of bonus depreciation. Ass access the depreciation table and click here to access the annual automobi

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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Question

During 2020, William purchases the following capital assets for use in his catering business:
New passenger automobile (September 30)
$53,400
Baking equipment (June 30)
16,020
Assume that William decides to use the election to expense on the baking equipment (and has adequate taxable income to cover the deduction) but not on the automobile (which has a 5-year recovery period), and he also uses
the MACRS accelerated method to calculate depreciation but elects out of bonus depreciation. Assume he has adequate taxable income.
Click here to access the depreciation table and click here to access the annual automobile depreciation limitations.
Calculate William's maximum depreciation deduction for 2020, assuming he uses the automobile 100 percent in his business.
X

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