Required information [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: Date Placed in Asset Cost Service Office furniture $ 300,000 02/03/2020 Machinery 1,590,000 07/22/2020 Used delivery 70,000 08/17/2020 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: Asset Computers and information system Luxury autot Assembly equipment Storage building Date Placed Cost in Service $ 430,000 03/31/2021 87,500 05/26/2021 1,350,000 08/15/2021 700,000 11/13/2021 tUsed 100% for business purposes. Karane generated taxable income in 2021 of $1,770,000 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.) Required: a. Compute the maximum 2020 depreciation deductions, including $179 expense (ignoring bonus depreciation). Description Office furniture Machinery Used delivery truck Total MACRS Current Total Cost Cost $179 MACRS Recovery Expense Basis Depreciation Deduction $ 300,000 $ of $300,000 $ 0 1,590,000 0 70,000 0 70,000 0 $ $ 0 $ 370,000 $ 0 $ 1,960,000 0 Required: b. Compute the maximum 2021 depreciation deductions, including $179 expense (ignoring bonus depreciation). Description Cost Section 179 Expense MACRS Basis Current Total Cost MACRS Recovery Depreciation Deduction $ $ 300,000 $ 1,590,000 70,000 0 $ 300,000 0 0 70,000 0 0 2020 Assets Office furniture Machinery Used delivery truck 2021 Assets Computers and Information System Luxury Auto Assembly Equipment Storage Building Total 430,000 0 0 0 87,500 1,350,000 700,000 $ 4,527,500 Oo 0 0 0 0 300,000 700,000 $ 1,370,000 $ 0 $ 0 $ 0 0 Required: c. Compute the maximum 2021 depreciation deductions, including $179 expense, but now assume that Karane would like to take bonus depreciation. Description Cost Section 179 Expense Bonus MACRS Basis Current Total Cost MACRS Recovery Depreciation Deduction $ $ 300,000 $ 1,590,000 70,000 0 $ 0 0 0 $ 300,000 0 0 70,000 0 0 0 2020 Assets Office Furniture Machinery Used Delivery Truck 2021 Assets Computers and Information System Luxury Auto Assembly Equipment Storage Building Total 0 0 0 0 0 430,000 87,500 1,350,000 700,000 $ 4,527,500 0 300,000 0 0 300,000 0 0 0 700,000 $ $ 1,070,000 $ 0 $ 300,000 0 $ 300,000 Required: d. Now assume that during 2021, Karane decides to buy a competitor's assets for a purchase price of $1,529,700. Compute the maximum 2021 cost recovery, including $179 expense and bonus depreciation. Karane purchased the following assets for the lump-sum purchase price: (Round your final answers to the nearest whole dollar amount.) Asset Inventory Office furniture Machinery Patent Goodwill Building Land Date Placed Cost in Service $ 09/15/2021 250,000 260,000 09/15/2021 280,000 09/15/2021 225,000 09/15/2021 4,700 09/15/2021 460,000 09/15/2021 50,000 09/15/2021 Assume that Karane takes the maximum section 179 expense for the Assembly Equipment. Description Cost Section 179 Expense Bonus MACRS Basis Current Total Cost Current MACRS Amortization Recovery Depreciation Deduction $ 0 $ 300,000 $ 1,590,000 70,000 of $ 0 0 0 $ 300,000 0 0 0 0 430,000 0 430,000 0 0 430,000 0 2020 Assets Office Furniture Machinery Used Delivery Truck 2021 Assets Computers and Information System Luxury Auto Assembly Equipment Storage Building Inventory Office Furniture Machinery Patent Goodwill Building Land 0 0 0 87,500 1,350,000 700,000 250,000 260,000 280,000 225,000 4,700 460,000 50,000 $ 6,057,200 0 0 0 300,000 0 0 260,000 280,000 0 300,000 0 0 700,000 0 0 260,000 0 280,000 0 0 0 0 0 0 460,000 0 0 $ $ 1,270,000 1,460,000 0 0 0 0 0 0 0 0 0 0 Totals 0 $ 1,270,000 $ 0 $ 0 $ 0 Required information [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: Date Placed in Asset Cost Service Office furniture $ 300,000 02/03/2020 Machinery 1,590,000 07/22/2020 Used delivery 70,000 08/17/2020 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: Asset Computers and information system Luxury autot Assembly equipment Storage building Date Placed Cost in Service $ 430,000 03/31/2021 87,500 05/26/2021 1,350,000 08/15/2021 700,000 11/13/2021 tUsed 100% for business purposes. Karane generated taxable income in 2021 of $1,770,000 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.) Required: a. Compute the maximum 2020 depreciation deductions, including $179 expense (ignoring bonus depreciation). Description Office furniture Machinery Used delivery truck Total MACRS Current Total Cost Cost $179 MACRS Recovery Expense Basis Depreciation Deduction $ 300,000 $ of $300,000 $ 0 1,590,000 0 70,000 0 70,000 0 $ $ 0 $ 370,000 $ 0 $ 1,960,000 0 Required: b. Compute the maximum 2021 depreciation deductions, including $179 expense (ignoring bonus depreciation). Description Cost Section 179 Expense MACRS Basis Current Total Cost MACRS Recovery Depreciation Deduction $ $ 300,000 $ 1,590,000 70,000 0 $ 300,000 0 0 70,000 0 0 2020 Assets Office furniture Machinery Used delivery truck 2021 Assets Computers and Information System Luxury Auto Assembly Equipment Storage Building Total 430,000 0 0 0 87,500 1,350,000 700,000 $ 4,527,500 Oo 0 0 0 0 300,000 700,000 $ 1,370,000 $ 0 $ 0 $ 0 0 Required: c. Compute the maximum 2021 depreciation deductions, including $179 expense, but now assume that Karane would like to take bonus depreciation. Description Cost Section 179 Expense Bonus MACRS Basis Current Total Cost MACRS Recovery Depreciation Deduction $ $ 300,000 $ 1,590,000 70,000 0 $ 0 0 0 $ 300,000 0 0 70,000 0 0 0 2020 Assets Office Furniture Machinery Used Delivery Truck 2021 Assets Computers and Information System Luxury Auto Assembly Equipment Storage Building Total 0 0 0 0 0 430,000 87,500 1,350,000 700,000 $ 4,527,500 0 300,000 0 0 300,000 0 0 0 700,000 $ $ 1,070,000 $ 0 $ 300,000 0 $ 300,000 Required: d. Now assume that during 2021, Karane decides to buy a competitor's assets for a purchase price of $1,529,700. Compute the maximum 2021 cost recovery, including $179 expense and bonus depreciation. Karane purchased the following assets for the lump-sum purchase price: (Round your final answers to the nearest whole dollar amount.) Asset Inventory Office furniture Machinery Patent Goodwill Building Land Date Placed Cost in Service $ 09/15/2021 250,000 260,000 09/15/2021 280,000 09/15/2021 225,000 09/15/2021 4,700 09/15/2021 460,000 09/15/2021 50,000 09/15/2021 Assume that Karane takes the maximum section 179 expense for the Assembly Equipment. Description Cost Section 179 Expense Bonus MACRS Basis Current Total Cost Current MACRS Amortization Recovery Depreciation Deduction $ 0 $ 300,000 $ 1,590,000 70,000 of $ 0 0 0 $ 300,000 0 0 0 0 430,000 0 430,000 0 0 430,000 0 2020 Assets Office Furniture Machinery Used Delivery Truck 2021 Assets Computers and Information System Luxury Auto Assembly Equipment Storage Building Inventory Office Furniture Machinery Patent Goodwill Building Land 0 0 0 87,500 1,350,000 700,000 250,000 260,000 280,000 225,000 4,700 460,000 50,000 $ 6,057,200 0 0 0 300,000 0 0 260,000 280,000 0 300,000 0 0 700,000 0 0 260,000 0 280,000 0 0 0 0 0 0 460,000 0 0 $ $ 1,270,000 1,460,000 0 0 0 0 0 0 0 0 0 0 Totals 0 $ 1,270,000 $ 0 $ 0 $ 0