Comprehensive Problem 10-74 (LO 10-1, LO 10-2, LO 10-3, LO 10-4, LO 10-5) Back i
ID: 2477301 • Letter: C
Question
Comprehensive Problem 10-74 (LO 10-1, LO 10-2, LO 10-3, LO 10-4, LO 10-5)
Back in Boston, Steve has been busy creating and managing his new company, Teton Mountaineering (TM), which is based out of a small town in Wyoming. In the process of doing so, TM has acquired various types of assets. Below is a list of assets acquired during 2014: (Use MACRS Table 1, Table 2, Table 3, Table 4 andTable 5.)
During 2014, TM had huge success (and had no §179 limitations) and Steve acquired more assets the next year to increase its production capacity. These are the assets acquired during 2015:
TM generated a taxable income in 2015 before any §179 expense of $732,500. Assume bonus depreciation and the 2014 §179 limitations are extended to 2015.
Comprehensive Problem 10-74 Part a, b, c and d
Compute maximum 2014 depreciation deductions including §179 expense (ignoring bonus depreciation).
Compute maximum 2015 depreciation deductions including §179 expense, but now assume that Steve would like to take bonus depreciation on the 2015 assets.
Ignoring part (c), now assume that during 2015, Steve decides to buy a competitor’s assets for a purchase price of $350,000. Compute maximum 2015 cost recovery including §179 expense (ignoring bonus depreciation). Steve purchased the following assets for the lump-sum purchase price.
[The following information applies to the questions displayed below.]Back in Boston, Steve has been busy creating and managing his new company, Teton Mountaineering (TM), which is based out of a small town in Wyoming. In the process of doing so, TM has acquired various types of assets. Below is a list of assets acquired during 2014: (Use MACRS Table 1, Table 2, Table 3, Table 4 andTable 5.)
Explanation / Answer
Answer:a 2014 depreciation is $513,003
Answer:b 2015 depreciation is $529,287
Description Cost Sec 179 expense MACRS Basis Current expense EOY Office equipment 10000 10000 10000 Machinery 560000 490000 70000 10003 500003 Used delivery truck 15000 15000 3000 3000 Totals 585000 500000 85000 10003 513003Related Questions
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