Comprehensive Problem 10-76 (LO 10-1, LO 10-2, LO 10-3, LO 10-4, LO 10-5) (Algo) [The following information applies to the questions displayed below] Karane Enterprises, a calendar-year manufacturer based in College Station, Texas, began business in 2020. In the process of setting up the business, Karane has acquired various types of assets. Below is a list of assets acquired during 2020: Asset Office furniture Machinery Used delivery truck Not considered a luxury automobile. Cost $ 310,000 1,592,000 72,000 During 2020, Karane was very successful (and had no $179 limitations) and decided to acquire more assets in 2021 to increase its production capacity. These are the assets acquired during 2021 Asset Computers and information system Luxury auto! Assembly equipment Storage building tUsed 100% for business purposes Karane generated taxable income in 2021 of $1,772,500 for purposes of computing the $179 expense limitation (Use MACRS Table 1. Table 2. Table 3. Table 4. Table 5, and Exhibit 10-10.) (Leave no answer blank. Enter zero if applicable. Input all the values as positive numbers.) Description Date Placed in Service 02/03/2020 07/22/2020 08/17/2020 Comprehensive Problem 10-76 Part a (Algo) Office furniture Machinery Used delivery truck Total Required: a. Compute the maximum 2020 depreciation deductions, including 5179 expense (ignoring bonus depreciation). Cost $ 412,000 88,000 1,360,000 800,000 Cost S Date Placed in Service 03/31/2021 05/26/2021 08/15/2021 11/13/2021 310,000 $ 1,592,000 72,000 $ 1,974.000 $ Current MACRS Depreciation or $ 310,000 $ 44.299 $ $179 Expense MACRS Basis 0 0 $ 72,000 382.000 $ 14,400 58,699 Total Cost Recovery Deduction S 44,299 0 14.400 58,699
Comprehensive Problem 10-76 (LO 10-1, LO 10-2, LO 10-3, LO 10-4, LO 10-5) (Algo) [The following information applies to the questions displayed below] Karane Enterprises, a calendar-year manufacturer based in College Station, Texas, began business in 2020. In the process of setting up the business, Karane has acquired various types of assets. Below is a list of assets acquired during 2020: Asset Office furniture Machinery Used delivery truck Not considered a luxury automobile. Cost $ 310,000 1,592,000 72,000 During 2020, Karane was very successful (and had no $179 limitations) and decided to acquire more assets in 2021 to increase its production capacity. These are the assets acquired during 2021 Asset Computers and information system Luxury auto! Assembly equipment Storage building tUsed 100% for business purposes Karane generated taxable income in 2021 of $1,772,500 for purposes of computing the $179 expense limitation (Use MACRS Table 1. Table 2. Table 3. Table 4. Table 5, and Exhibit 10-10.) (Leave no answer blank. Enter zero if applicable. Input all the values as positive numbers.) Description Date Placed in Service 02/03/2020 07/22/2020 08/17/2020 Comprehensive Problem 10-76 Part a (Algo) Office furniture Machinery Used delivery truck Total Required: a. Compute the maximum 2020 depreciation deductions, including 5179 expense (ignoring bonus depreciation). Cost $ 412,000 88,000 1,360,000 800,000 Cost S Date Placed in Service 03/31/2021 05/26/2021 08/15/2021 11/13/2021 310,000 $ 1,592,000 72,000 $ 1,974.000 $ Current MACRS Depreciation or $ 310,000 $ 44.299 $ $179 Expense MACRS Basis 0 0 $ 72,000 382.000 $ 14,400 58,699 Total Cost Recovery Deduction S 44,299 0 14.400 58,699
Chapter7: Deductions And Losses: Certain Business Expenses And Losses
Section: Chapter Questions
Problem 36P
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![Comprehensive Problem 10-76 (LO 10-1, LO 10-2, LO 10-3, LO 10-4, LO 10-5) (Algo)
[The following information applies to the questions displayed below]
Karane Enterprises, a calendar-year manufacturer based in College Station, Texas, began business in 2020. In the process
of setting up the business, Karane has acquired various types of assets. Below is a list of assets acquired during 2020:
Asset
office furniture
Machinery
Used delivery truck
*Not considered a luxury automobile.
During 2020, Karane was very successful (and had no §179 limitations) and decided to acquire more assets in 2021 to
increase its production capacity. These are the assets acquired during 2021:
Cost
$ 310,000
1,592,000
72,000
Asset
Computers and information system
Luxury auto
Assembly equipment
Storage building
1Used 100% for business purposes
Karane generated taxable income in 2021 of $1,772,500 for purposes of computing the $179 expense limitation
(Use MACRS Table 1. Table 2. Table 3. Table 4. Table 5, and Exhibit 10-10.) (Leave no answer blank. Enter zero if
applicable. Input all the values as positive numbers.)
Description
Date Placed in
Service
02/03/2020
07/22/2020
08/17/2020
Comprehensive Problem 10-76 Part a (Algo)
Office furniture
Machinery
Used delivery truck
Total
BE
Cost
$ 432,000
88,000
1,360,000
800,000
4
Required:
a. Compute the maximum 2020 depreciation deductions, including 5179 expense (ignoring bonus depreciation).
Cost
Date Placed in
Service
03/31/2021
05/26/2021
08/15/2021
11/13/2021
$ 310,000 $
1,592,000
72,000
5 1,974.000 $
$179 Expense MACRS Basis
310.000
0 $
0
05
Current
MACRS
Depreciation
S 44.299 $
72,000
382.000 S
Total Cost
Recovery
Deduction
14 400
58,699 S
< Prev
44,299
0
14.400
58,699
8
8 9 10 11
of 11
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Transcribed Image Text:Comprehensive Problem 10-76 (LO 10-1, LO 10-2, LO 10-3, LO 10-4, LO 10-5) (Algo)
[The following information applies to the questions displayed below]
Karane Enterprises, a calendar-year manufacturer based in College Station, Texas, began business in 2020. In the process
of setting up the business, Karane has acquired various types of assets. Below is a list of assets acquired during 2020:
Asset
office furniture
Machinery
Used delivery truck
*Not considered a luxury automobile.
During 2020, Karane was very successful (and had no §179 limitations) and decided to acquire more assets in 2021 to
increase its production capacity. These are the assets acquired during 2021:
Cost
$ 310,000
1,592,000
72,000
Asset
Computers and information system
Luxury auto
Assembly equipment
Storage building
1Used 100% for business purposes
Karane generated taxable income in 2021 of $1,772,500 for purposes of computing the $179 expense limitation
(Use MACRS Table 1. Table 2. Table 3. Table 4. Table 5, and Exhibit 10-10.) (Leave no answer blank. Enter zero if
applicable. Input all the values as positive numbers.)
Description
Date Placed in
Service
02/03/2020
07/22/2020
08/17/2020
Comprehensive Problem 10-76 Part a (Algo)
Office furniture
Machinery
Used delivery truck
Total
BE
Cost
$ 432,000
88,000
1,360,000
800,000
4
Required:
a. Compute the maximum 2020 depreciation deductions, including 5179 expense (ignoring bonus depreciation).
Cost
Date Placed in
Service
03/31/2021
05/26/2021
08/15/2021
11/13/2021
$ 310,000 $
1,592,000
72,000
5 1,974.000 $
$179 Expense MACRS Basis
310.000
0 $
0
05
Current
MACRS
Depreciation
S 44.299 $
72,000
382.000 S
Total Cost
Recovery
Deduction
14 400
58,699 S
< Prev
44,299
0
14.400
58,699
8
8 9 10 11
of 11
Nex
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