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 2018. In the processof setting up the business, Karane has acquired various types of assets. Below is a list of assets acquired during 2018:Office furnitureMachineryUsed delivery truck**Not considered a luxury automobile.During 2018, Karane was very successful (and had no §179 limitations) and decided to acquire more assets in 2019 toIncrease its production capacity. These are the assets acquired during 2019:AssetComputers & info. systemLuxury autotAssembly equipmentStorage buildingAssetDescription2018 AssetsOffice furnitureMachineryUsed delivery truckTotals2019 AssetsComputers & Info. SystemLuxury AutoAssembly EquipmentStorage BuildingCost$ 150,0001,560,00040,000tUsed 100% for business purposes.Karane generated taxable income in 2019 of $1,732,500 for purposes of computing the $179 expense. (Use MACRSTable 1, Table 2, Table 3, Table 4, Table 5, and Exhibit 10-10.) (Leave no answer blank. Enter zero if applicable. Input allthe values as positive numbers.)b. Compute the maximum 2019 depreciation deductions, including §179 expense (ignoring bonus depreciation).Cost400,00080,0001,200,000700,000Cost$Date Placed inService02/03/201807/22/201808/17/2018Date Placed inService03/31/201905/26/201908/15/201911/13/2019Sec. 179ExpenseMACRS BasisCurrent MACRSDepreciationTotalDepreciationDeduction

Depreciation is a concept that is used to write off the cost of an item over its usable life.…

Answered: Käräne Enterprises, a

Business

Accounting

Käräne Enterprises, a

CONCEPTS IN FED.TAX.,2020-W/ACCESS

20th Edition

ISBN:9780357110362

Author:Murphy

Publisher:Murphy

Chapter10: Cost Recovery On Property: Depreciation, Depletion, And Amortization

Section: Chapter Questions

Problem 75IP

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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: Asset Office furniture. Machinery Used delivery 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: Cost $ 300,000 1,590,000 70,000 Asset Computers and information system Luxury autot Assembly equipment Storage building Description Office furniture Machinery Used delivery truck Total $ Date Placed in Service 02/03/2020 07/22/2020 08/17/2020 Cost $430,000 tUsed 100% for business purposes. Karane generated taxable income in 2021 of $1,770,000 for purposes of computing the §179…
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 2021. In the process of setting up the business, Karane has acquired various types of assets. Below is a list of assets acquired during 2021: Asset Office furniture. Machinery Used delivery truck* *Not considered a luxury automobile. During 2021, Karane was very successful (and had no §179 limitations) and decided to acquire more assets in 2022 to increase its production capacity. These are the assets acquired during 2022: Asset Cost $ 150,000 1,560,000 40,000 Description 2021 Assets Office Furniture Machinery Used Delivery Truck 2022 Assets Computers and information system Luxury auto* Assembly equipment Storage building *Used 100% for business purposes. Karane generated taxable income in 2022 of $1,732,500 for purposes of computing the §179 expense limitation. (Use MACRS Table 1, Table 2, Table…
Karane Enterprises, a calendar-year manufacturer based in College Station, Texas, began business in 2019. In the process of setting up the business, Karane has acquired various types of assets. Below is a list of assets acquired during 2019: Date Placed in Asset Cost Service Office furniture 2$ 150,000 1,560,000 40,000 02/03/2019 Machinery Used delivery truck* 07/22/2019 08/17/2019 *Not considered a luxury automobile. During 2019, Karane was very successful (and had no §179 limitations) and decided to acquire more assets in 2020 to increase its production capacity. These are the assets acquired during 2020: Date Placed in Asset Cost Service Computers & info. system Luxury autot Assembly equipment Storage building $ 400,000 80,000 1,200,000 700,000 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,…
karane enterprises, a calendar year manufadturer based in college station, texas, begain 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. asset: office furniture, cost: $ 150,000, date placed in service 02/ Used delivery truck, cost $40,000, date placed in service 08/17/2022. During 2022, karane was very successful (and had no 179 limitations) and decided to acquire more assets in 2023 to increase its production capacity. These are the assets acquired during 2023: Asset: computers and information system, cost $400,000, date placed in service 03/31/2023. Luxury auto *, cost $80,000, date placed in service 05/26/2023, Assembly equipment, cost $1,200,000 date placed in service 08/15/2023, storage building cost $700,000, date placed in service 11/13/2023. *Used 100% for business purposes. Karane generated taxable income in 2023 of $ 1,732, 500 for purposes of computing the 179 expense…
Answer one question from this section. 1. Visionary Toys (VT) Visionary Toys (VT) produces highly innovative toys for children. VT began operation in January 2017 and its unique selling point/proposition (USP) is producing toy parts with a 3D printer. VT uses the reducing balance method of depreciation. 3D technology changes rapidly and the financial directors are also considering ways of reducing VT's tax liabilities in 2018. The financial director presented financial information for VT at the end of 2017. Table 1: Revenue and expense information for the year 2017 and balance sheet items at 31 December 2017 Cash $1000 Net fixed assets $27 000 Interest paid $250 Creditors $4000 $3500 Debtors Accumulated retained profit end of 2017 $10000 Costs of goods sold $7500 Sales revenue $27 250 Short-term loans $1500 Overdraft balance $2000 $7000 Expenses Share capital Dividends paid $13500 $2500 Long-term liabilities Stock of toy parts $5000 $4500 [Source: © International Baccalaureate…
Sky Co., organized in 2017, provided you with the following information.1. Purchased a license for $20,000 on July 1, 2017. The license gives Sky exclusive rights to sell its services in the tri-state region and will expire on July 1, 2025.2. Purchased a patent on January 2, 2018, for $40,000. It is estimated to have a 5-year life.3. Costs incurred to develop an exclusive Internet connection process as of June 1, 2018, were $45,000. The process has an indefinite life.4. On April 1, 2018, Sky purchased a small circuit board manufacturer for $350,000. Goodwill recorded in the transaction was $90,000. 5. On July 1, 2018, legal fees for successful defense of the patent purchased on January 2, 2018, were $11,400.6. Research and development costs incurred as of September 1, 2018, were $75,000.Instructions(a) Prepare the journal entries to record all the entries related to the patent during 2018.(b) At December 31, 2018, an impairment test is performed on the license purchased in 2017. It is…
! Required information [The following information applies to the questions displayed below.] Bethany incurred $20,800 in research and experimental costs for developing a specialized product during July 2023. Bethany went through a lot of trouble and spent $10,400 in legal fees to receive a patent for the product in August 2025. Bethany expects the patent to have a remaining useful life of 10 years. Note: Do not round intermediate calculations. b. How much patent amortization expense would Bethany deduct in 2025? Deductible patent amortization expense
Wyoming Real Estate purchased a building for $600,000 in 2002. At the end of 2014, when it had a book value of $450,000, it was appraised for $1,000,000. A potential buyer offered $900,000. Wyoming rejected the offer. What amount should is recorded on Wyoming’s records at the end of 2014 in the account called Buildings? a. $1,000,000 b. $900,000 c. $600,000 d. $450,000
Liontari Ltd conducts a business that makes women’s shoes. It operates a factory in an innersuburb of Nicosia. The factory contains a large amount of equipment that is used in themanufacture of shoes.Liontari Ltd owns both the factory and the land on which the factory stands.The land was acquired in 2010 for $200 000 and the factory was built in that year at a cost of$520,000.Both assets are recorded at cost, with the factory having a carrying amount at 30 June 2020of $260,000. In recent years a property boom in Nicosia has seen residential house pricesdouble. The average price of a house is now approximately $500,000. A property valuationgroup used data about recent sales of land in the area to value the land on which the factorystands at $1,000,000.The land is now considered prime residential property given its closeness to the city and,with its superb river views, its suitability for building executive apartments. It would cost$100,000 to demolish the factory to make way for these…
Waterway Corporation operates a retail computer store. To improve delivery services to customers, the company purchases four new trucks on April 1, 2025. The terms of acquisition for each truck are described below. 1. Truck #1 has a list price of $47,550 and is acquired for a cash payment of $44,063. 2. 3. 4. Truck #2 has a list price of $50,720 and is acquired for a down payment of $6,340 cash and a zero-interest-bearing note with a face amount of $44,380. The note is due April 1, 2026. Waterway would normally have to pay interest at a rate of 9% for such a borrowing, and the dealership has a borrowing rate of 8%. Truck #3 has a list price of $50,720. It is acquired in exchange for a computer system that Waterway carries in inventory. The computer system cost $38,040 and is normally sold by Waterway for $48,184. Waterway uses a perpetual inventory system. Truck #4 has a list price of $15,080. It is acquired in exchange for 1,080 shares of common stock in Waterway Corporation. The…
Williams-Santana Incorporated is a manufacturer of high-tech industrial parts that was started in 2012 by two talented engineers with little business training. In 2024, the company was acquired by one of its major customers. As part of an internal audit, the following facts were discovered. The audit occurred during 2024 before any adjusting entries or closing entries were prepared. a. A five-year casualty insurance policy was purchased at the beginning of 2022 for $35,000. The full amount was debited to insurance expense at the time. b. Effective January 1, 2024, the company changed the salvage value used in calculating depreciation for its office building. The building cost $600,000 on December 29, 2013, and has been depreciated on a straight-line basis assuming a useful life of 40 years and a salvage value of $100,000. Declining real estate values in the area indicate that the salvage value will be no more than $25,000. c. On December 31, 2023, merchandise inventory was overstated…
Menlyn Mowbray owns a fleet of light delivery vehicles (aka bakkie). One of his delivery vehicles with a market value of R170 000, and which had originally cost R190 000 on 1 March 2020 was exactly two years old at that point in time. (The Small Business Development Corporation had valued it at this date to determine the value of his assets and liabilities before granting him a loan. As of 1 March 2020, he has used his light delivery van as follows: § 60% for private purposes § 40% for business purposes at his trading store Menlyn Mowbray’s costs for in relation to this delivery vehicle incurred during the 2020 year of assessment were as follows: Fuel and oil Repairs and maintenance Licence Insurance 31 200 6 000 720 6 00 Additional information: The Commissioner has approved a four-year write off period for the light delivery vehicle. 1.1 Discuss and determine the amounts that resulting from the above transactions that are deductible in the determination of Menlyn Mowbray’s taxable…