35. instructions : Choose the best multiple choice answer and explain why you ch
ID: 2587687 • Letter: 3
Question
35. instructions : Choose the best multiple choice answer and explain why you chose the answer. MUST provide 2-3 sentence brief explanation and show all work. All sources must be noted.
____ 35. Jayne Company acquires a new machine (ten-year property) on January 15, 2013, at a cost of $180,000. Jayne also acquires another new machine (seven-year property) on November 5, 2012, at a cost of $30,000. No election is made to use the straight-line method. The company does not make the § 179 election. Jayne takes additional first-year depreciation. Determine the total deductions in calculating taxable income related to the machines for 2013.
a.
$116,143.
b.
$11,143.
c.
$22,287.
d.
$132,858.
e.
None of the above.
a.
$116,143.
b.
$11,143.
c.
$22,287.
d.
$132,858.
e.
None of the above.
Explanation / Answer
a. $116,143 ,
new machine (ten-year property) on January 15, 2013 :
additional first-year depreciation [180000 * 50% half year convention] = $90000
MACR depreciation [$90000 * 10%] = $9000
= $99000
another new machine (seven-year property) on November 5, 2013 :
additional first-year depreciation [ $30,000 * 50% half year convention] = $15000
MACR depreciation [$15000 * 14.29%] = $2143.5
= $17143.5
Total deductions [$99000 + $17143.5] = $116143
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