Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Karane Enterprises, a calendar-year manufacturer based in College Station, Texas, began business in 2019. In the process of setting up the business, Karane has acquired

Karane Enterprises, a calendar-year manufacturer based in College Station, Texas, began business in 2019. In the process of setting up the business, Karane has acquired various types of assets. Below is a list of assets acquired during 2019:

Asset Cost Date Placed in Service
Office furniture $ 150,000 02/03/2019
Machinery 1,560,000 07/22/2019
Used delivery truck* 40,000 08/17/2019

*Not considered a luxury automobile.

During 2019, Karane was very successful (and had no 179 limitations) and decided to acquire more assets in 2020 to increase its production capacity. These are the assets acquired during 2020:

Asset Cost Date Placed in Service
Computers & info. system $ 400,000 03/31/2020
Luxury auto 80,000 05/26/2020
Assembly equipment 1,200,000 08/15/2020
Storage building 700,000 11/13/2020

Used 100% for business purposes.

Karane generated taxable income in 2020 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.) (Leave no answer blank. Enter zero if applicable. Input all the values as positive numbers.)

c. Compute the maximum 2020 depreciation deductions, including 179 expense, but now assume that Karane would like to take bonus depreciation as well.

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Managerial Accounting

Authors: Stacey Whitecotton, Robert Libby, Fred Phillips

4th edition

1259964957, 1260413985, 1260565440, 978-1260413984

More Books

Students also viewed these Accounting questions

Question

help me solve the empty ones.

Answered: 1 week ago