60.1K

Verified Solution

Link Copied!

e """ 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 2022. In the process of setting up the business, Karane has acquired various types of assets. Below is a list of assets acquired during 2022: Date Placed in Asset Cost Service 0ffice furniture $ 330,000 02/03/2022 Machinery 1,740,000 07/22/2022 Used delivery trucksx 76,000 08/17/2022 *Not considered a luxury automobile. During 2022, Karane was very successful (and had no 8179 limitations) and decided to acquire more assets in 2023 to increase its production capacity. These are the assets acquired during 2023: Date Placed in Asset Cost Service Computers and information system $ 436,000 03/31/2023 Luxury autox 89,000 05/26/2023 Assembly equipment 1,380,000 08/15/2023 Storage building 700,000 11/13/2023 *Used 100% for business purposes. Karane generated taxable income in 2023 of $1,777,500 for purposes of computing the 179 expense limitation. (Use Note: Leave no answer blank. Enter zero if applicable. Input all the values as positive numbers. Required: Compute the maximum 2022 depreciation deductions, including 179 expense (ignoring bonus depreciation). Note: Apply the 179 deduction to the most expensive eligible asset first. Round your final answers to nearest whole dollar. | Answer is not complete. Office furniture $ 330,000@ 3 $ 330,000 @ Machinery 1,740,000 @ Used delivery truck 76,000 @ Total $ 2,146,000 0 76,000 @ 15,200 @ 15,200 $ 406,000 62,357 Required: b. Compute the maximum 2023 depreciation deductions, including 179 expense (ignoring bonus depreciation). Note: Round your final answers to nearest whole dollar. Answer is not complete. 2022 Assets Office furniture $ 330,000@ $ 0@ |$ 330,000@ 3 80817@ |3 80,817 1,740,000 @ 0 Machinery Used delivery truck 76,000 @ 0 76,000 @ 24,320 @ 24,320 2023 Assets Sy;';p\"tem and Information 436,000 @ 0@ 436000@ 87200@| 87,200 Luxury Auto 89,000 @ 0 89,000 @ 0 Assembly Equipment 1,380,000 0 Storage Building 700,000 @ 0 700,000 @ 2247 @ Total $ 4,751,000 |$ 0 |$ 1,631,000 |$ 194,584 Required: c. Compute the maximum 2023 depreciation deductions, including 179 expense, but now assume that Karane would like to take bonus depreciation. Note: Round your final answers to nearest whole dollar. 2022 Assets Answer is not complete. Office Furniture Machinery Used Delivery Truck 76,000 & s 00008 oo $ 330,000@ 3 Q 76,000 @ 80,817 @ 24,320 @ 80,817 24,320 2023 Assets Luxury Auto Assembly Equipment Computers and Information System 436,000 @ 1,380,000 & 87,200 @ o 87,200 @ o 0o 87,200 8,000 0 Storage Building 700,000 & 700,000 @ 2247 @ 2,247 Total $ 4,751,000 $ 1,274,200 194,584 $ 202,584 d. Now assume that during 2023, Karane decides to buy a competitor's assets for a purchase price of $1,565,640. Compute the maximum 2023 cost recovery, including 8179 expense and bonus depreciation. Karane purchased the following assets for the lump- sum purchase price: Note: Round your final answers to the nearest whole dollar amount. Date Placed in Asset Cost Service Inventory $ 256,000 09/15/2023 0ffice furniture 266,000 09/15/2023 Machinery 286,000 09/15/2023 Patent 230,400 09/15/2023 Goodwill 5,240 09/15/2023 Building 466,000 09/15/2023 Land 56,000 09/15/2023 Assume that Karane takes the maximum section 179 expense for the Assembly Equipment. Assume that Karane takes the maximum section 179 expense for the Assembly Equipment. Answer is complete but not entirely correct. 2022 Assets Office Furniture $ 330,000 @ 3 0@ 0@ s 330,000@ |$ 0 80,817 @ 3 0 Machinery 1,740,000 @ 0 0 0 0 0 0 Used Delivery Truck 76,000 @ 0 0 0 24,320 0 2023 Assets Computers and Information System 436,000 @ 0 0 0 0 87,200 @ 0 Luxury Auto 89,000 @ 0 8,000 @ 0 %] 0 8,000 Assembly Equipment 1,380,000 @ | 1,020,000 & 0 o] x) 0 0@ | 1,020,000 Storage Building 700,000 @ 0 0 0 2247 Q 0 Inventory 256,000 @ 0 0 0 0 0 0 Office Furniture 266,000 @ 0 266,000 0 0 0 266,000 Machinery 286,000 @ 0 286,000 @ 0 0 0 286,000 Patent 230,400 @ 0 0 0 230,400 0 0 Goodwill 5240 @ 0 0 0 5240 @ 0 5,240 Building 466,000 @ 0 0 0 466,000 @ 0 466,000 Land 56,000 @ 0 0 0 0 0 0 Totals $ 6,316,640 |$ 1,020,000 |$ 560,000 |$ 330,000 |($ 701,640 |$ 194,584 |$ 2,051,240

Answer & Explanation Solved by verified expert

See Answer