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Required information Comprehensive Problem 10-76 (LO 10-1, LO 10-2, LO 10-3, LO 10-4, LO 10-5) [The following information applies to the questions displayed below.) Karane Enterprises, a calendar-year manufacturer based in College Station, Texas, began business in 2017. In the process of setting up the business, Karane has acquired various types of assets. Below is a list of assets acquired during 2017: Asset Office furniture Machinery Used delivery truck* Cost $ 150,000 1,560,000 40,000 Date Placed in Service 02/03/2017 07/22/2017 08/17/2017 *Not considered a luxury automobile. During 2017, Karane was very successful and had no $179 limitations) and decided to acquire more assets this next year to increase its production capacity. These are the assets acquired during 2018: Asset Computers & info. system Luxury autot Assembly equipment Storage building Cost $ 400,000 80,000 1,200,000 700,000 Date Placed in Service 03/31/2018 05/26/2018 08/15/2018 11/13/2018 tUsed 100% for business purposes. Karane generated taxable income in 2018 of $1,732,500 for purposes of computing the $179 expense. (Use MACRS Table 1, Table 2, Table 3, Table 4, Table 5, and Exhibit 10-10.) Assume the 2017 $179 limits are the same as those in 2018. (Leave no answer blank. Enter zero if applicable. Input all the values as positive numbers.) Comprehensive Problem 10-76 Part d Now assume that during 2018, Karane decides to buy a competitor's assets for a purchase price of $1,350,000. Compute the maximum 2018 cost recovery including S179 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 Cost $ 220,000 230,000 250,000 198,000 2,000 430,000 20,000 Date Placed in Service 09/15/2018 09/15/2018 09/15/2018 09/15/2018 09/15/2018 09/15/2018 09/15/2018 Answer is not complete. Description Cost Sec. 179 Expense Bonus MACRS Basis Current MACRS Depreciation Total Depreciation Deduction $ $ $ $ $ 2017 Assets Office furniture Machinery Used delivery truck 150,000 1,560,000 40,000 0 0 68,572X 0 150,000 560,000 40,000 36,735 137,144 12,800 36,735 205,716 12,800 0 400,000 2018 Assets Computers & Info. System Luxury Auto Assembly Equipment Storage Building 0 400,000 80,000 1,200,000 700,000 400,000 8,000 200,000 10,000 72,000 0 700,000 18,000 1,200,000 1,000,000 2,247 2,247 0 Inventory Office Furniture Machinery Patent 0 230,000 250,000 o 0 220,000 230,000 250,000 198,000 2,000 430,000 20,000 0 0 0 0 4,356 X 100 X 0X O 230,000 250,000 4,356 100 0 198,000 2,000 430,000 Goodwill 0 0 0 Building Land 0 Totals $ 5,480,000 $ 1,000,000 $ 1,156,572 $ 2,152,000 $ 203,382 Required information Comprehensive Problem 10-76 (LO 10-1, LO 10-2, LO 10-3, LO 10-4, LO 10-5) [The following information applies to the questions displayed below.) Karane Enterprises, a calendar-year manufacturer based in College Station, Texas, began business in 2017. In the process of setting up the business, Karane has acquired various types of assets. Below is a list of assets acquired during 2017: Asset Office furniture Machinery Used delivery truck* Cost $ 150,000 1,560,000 40,000 Date Placed in Service 02/03/2017 07/22/2017 08/17/2017 *Not considered a luxury automobile. During 2017, Karane was very successful and had no $179 limitations) and decided to acquire more assets this next year to increase its production capacity. These are the assets acquired during 2018: Asset Computers & info. system Luxury autot Assembly equipment Storage building Cost $ 400,000 80,000 1,200,000 700,000 Date Placed in Service 03/31/2018 05/26/2018 08/15/2018 11/13/2018 tUsed 100% for business purposes. Karane generated taxable income in 2018 of $1,732,500 for purposes of computing the $179 expense. (Use MACRS Table 1, Table 2, Table 3, Table 4, Table 5, and Exhibit 10-10.) Assume the 2017 $179 limits are the same as those in 2018. (Leave no answer blank. Enter zero if applicable. Input all the values as positive numbers.) Comprehensive Problem 10-76 Part d Now assume that during 2018, Karane decides to buy a competitor's assets for a purchase price of $1,350,000. Compute the maximum 2018 cost recovery including S179 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 Cost $ 220,000 230,000 250,000 198,000 2,000 430,000 20,000 Date Placed in Service 09/15/2018 09/15/2018 09/15/2018 09/15/2018 09/15/2018 09/15/2018 09/15/2018 Answer is not complete. Description Cost Sec. 179 Expense Bonus MACRS Basis Current MACRS Depreciation Total Depreciation Deduction $ $ $ $ $ 2017 Assets Office furniture Machinery Used delivery truck 150,000 1,560,000 40,000 0 0 68,572X 0 150,000 560,000 40,000 36,735 137,144 12,800 36,735 205,716 12,800 0 400,000 2018 Assets Computers & Info. System Luxury Auto Assembly Equipment Storage Building 0 400,000 80,000 1,200,000 700,000 400,000 8,000 200,000 10,000 72,000 0 700,000 18,000 1,200,000 1,000,000 2,247 2,247 0 Inventory Office Furniture Machinery Patent 0 230,000 250,000 o 0 220,000 230,000 250,000 198,000 2,000 430,000 20,000 0 0 0 0 4,356 X 100 X 0X O 230,000 250,000 4,356 100 0 198,000 2,000 430,000 Goodwill 0 0 0 Building Land 0 Totals $ 5,480,000 $ 1,000,000 $ 1,156,572 $ 2,152,000 $ 203,382

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