Required information Comprehensive Problem 10-76 (LO 10-1, LO 10-2, LO 10-3, LO 10-4, LO 10-5) (The following information applies to the questions displayed below.) 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 Office furniture Machinery Used delivery truck* Cost $ 150,000 1,560,000 40,000 Date Placed in Service 02/03/2019 07/22/2019 08/17/2019 *Not considered a luxury automobile. During 2019, Karane was very successful and had no 3179 limitations) and decided to acquire more assets in 2020 to increase its production capacity. These are the assets acquired during 2020: Asset Computers & info. system Luxury autot Assembly equipment Storage building Cost $ 400,000 80,000 1,200,000 700,000 Date Placed in Service 03/31/2020 05/26/2020 08/15/2020 11/13/2020 tUsed 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.) Comprehensive Problem 10-76 Part a a. Compute the maximum 2019 depreciation deductions, including $179 expense (ignoring bonus depreciation). Description Cost $179 Expense MACRS Basis Current MACRS Depreciation Total Cost Recovery Deduction Office furniture $ 0 O Machinery Delivery truck Total 2019 Cost Recovery 0 $ 0 $ 0 $ $ 0 $ b. Compute the maximum 2020 depreciation deductions, including $179 expense (ignoring bonus depreciation). Description Cost Sec. 179 Expense MACRS Basis Current MACRS Depreciation Total Cost Recovery Deduction 2019 Assets Office furniture 150,000 $ 0 $ $ 36,735 $ 0 Machinery Used delivery truck 132,246 150,000 540,000 40,000 1,560,000 40,000 36,735 132,246 12,800 0 12,800 2020 Assets 400,000 0 80,000 80,000 0 Computers & Info. System Luxury Auto Assembly Equipment Storage Building 80,000 1,200,000 700,000 400,000 80,000 160,000 700,000 1,040,000 3,160 22,864 2,247 3,160 1,062,864 2,247 0 Total 2020 Cost Recovery $ 4,130,000 $ 1,040,000 $ 2,070,000 $ 290,052 $ 1,330,052 Description Cost Sec. 179 Expense Bonus MACRS Basis Current MACRS Depreciation Total Cost Recovery Deduction 2019 Assets Office Furniture $ $ 0 150,000 1,560,000 40,000 Machinery Used Delivery Truck o 0 2020 Assets 400,000 0 Computers & Info. System Luxury Auto Assembly Equipment Storage Building o o 0 Total 2020 Cost Recovery 2,150,000 0 $ 0 0 $ 0 $ o
