Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

On April 18, 2020, Petros buys all the assets of Brigid's Muffler Shop. Included in the purchase price of $295,000 is a payment of $20,000

image text in transcribed

On April 18, 2020, Petros buys all the assets of Brigid's Muffler Shop. Included in the purchase price of $295,000 is a payment of $20,000 to Brigid not to open a competing shop in the state for a period of 5 years. Brigid's assets at the date of sale are as follows: Asset Adjusted basis Fair Market Value Inventory $8,500 $10,000 Equipment 3,500 30,000 Building 80,000 120,000 Patent 500 15,000 Land 5,000 10,000 The patent is on a special muffler that Brigid developed and patented 5 years ago. Petros would like to know the maximum amount of the deduction he will be allowed on 5 the purchase of Brigid's assets for 2020. Refer to the MACRS Depreciation Tables to answer the following question. Note: Do not round any division. Round other computations to the nearest whole dollar. Assume the equipment has a MACRS recovery period of 7 years and that bonus depreciation is taken in the year of acquisition. The maximum amount of the deduction Petros will be allowed on the purchase of Brigid's assets for 2020 is $

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

Accounting Ethics

Authors: Ronald F. Duska, Brenda Shay Duska, Kenneth Wm. Kury

3rd Edition

1119118786, 9781119118787

More Books

Students also viewed these Accounting questions

Question

Describe the factors influencing of performance appraisal.

Answered: 1 week ago

Question

What is quality of work life ?

Answered: 1 week ago