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:
76. 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 Date Placed in Service Office furniture 02/03/2020 Machinery 07/22/2020 Used delivery truck 08/17/2020 "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 Page 10.58 its production capacity. These are the assets acquired during 2021: Cost $ 150,000 1,560,000 40.000 Asset Cost Date Placed in Service Computers & info system $ 400.000 03/312021 Luxury auto 80,000 05/26/2021 Assembly equipment 1.200,000 08/15/2021 Storage building 700,000 11/13/2021 "Used as for business purposes Karane generated taxable income in 2021 of $1.732.500 for purposes of computing the $ 179 expense limitation a) Compute the maximum 2020 depreciation deductions, including $179 expense (ignoring bonus depreciation). b) Compute the maximum 2021 depreciation deductions, including $179 expense (ignoring bonus depreciation) c) Compute the maximum 2021 depreciation deductions, including $179 expense, but now assume that Karane would like to take bonus depreciation d) Now assume that during 2021, Karane decides to buy a competitor's assets for a purchase price of $1,350,000. Compute the maximum 2021 cost recovery, including $179 expense and bonus depreciation, Karane purchased the following assets for the lump-sum purchase price: Asset Cost Date Placed in Service Inventory $220,000 09/15/2021 Office furniture 230,000 09/15/2021 Machinery 250,000 09/15/2021 Patent 198,000 09/15/2021 Goodwill 2,000 09/15/2021 Building 430,000 09/15/2021 Land 20,000 09/15/2021 e) Complete Jorm 4562 for part (b) (use the most current form available) Narandas acuario Testaccionar o seara Asset Cost Date Placed in Service Orice furniture $ 150.DOO 02/03/2020 Machinery 1,500,000 07/22/2020 Used delivery truck 40.000 17/2020 "f , Durina 2020, Karane was very successful cand had no 5179 limitations and decided to acquire more assets in 2021 to increase its production capacity. These are the assets acquired during 2021 Page 10 Date Placed in Service Asset Computers into wystem Luxury auto Annembly equipment Storage building Cost $ 400 000 B0.000 1.200 000 700.000 OS/20/2021 2021 1/10/2021 Katane venerated table income in 2021 or $1.732.500 for purposes of computing the $179 expense limitation Accum depreco Date in ve Asset Method Life Convention Cost $179 expense MACRS basis Rate Current expense Total expertise amor 1.050.000 02/03/20 Olice furniture 07/22/20 Machinery ON 17/20 Und delivery truck 01/31/21 Computer info system 05/2621 Luxury auto 08/15/21 Assembly equipment 11/13:21 Storage building 150,000 1.560.000 40,000 400,000 NO.000 1.200,000 700.000 150,000 510,000 40,000 40,000 80,000 150,000 700,000 1,050,000
