Tom's business has a preliminary Schedule C income of $400,000 so she would fike to see if she can maximize the cost recovery. What would be the cost recovery deduction for equipment that cost the $650,000 which was purchased on May 1. 2020? Remember that there may be limitations assigned to a particular option. Do not use decimal places or dollar signs in your answers. Electing Section 179 cost recovery for 2020 First Year Depreciation for 2020 MACRS without first year and section 179 election for 2020

Tom's business has a preliminary Schedule C income of $400,000 so she would fike to see if she can maximize the cost recovery. What would be the cost recovery deduction for equipment that cost the $650,000 which was purchased on May 1. 2020? Remember that there may be limitations assigned to a particular option. Do not use decimal places or dollar signs in your answers. Electing Section 179 cost recovery for 2020 First Year Depreciation for 2020 MACRS without first year and section 179 election for 2020

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Description: Tom's business has a preliminary Schedule C income of $400,000 so she would like to see if shecan maximize the cost recovery.What would be the cost recovery deduction for equipment that cost the $650,000 which waspurchased on May 1, 2020? Remember t

SWFT Comprehensive Vol 2020

43rd Edition

ISBN:9780357391723

Author:Maloney

Publisher:Maloney

Chapter8: Depreciation, Cost Recovery, Amortization, And Depletion

Section: Chapter Questions

Problem 47P

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In 2020, Pina Corporation discovered that equipment purchased on January 1, 2018, for $47,000 was expensed at that time. The equipment should have been depreciated over 5 years, with no salvage value. The effective tax rate is 30%. Pina uses straight-line depreciation. Prepare Pina's 2020 journal entry to correct the error. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts.) Account Titles and Explanation Debit Credit
Refer to the information for Cox Inc. above. What amount would Cox record as depreciation expense for 2019 if the units-of-production method were used ( Note: Round your answer to the nearest dollar)? a. $179,400 b. $184,000 c. $218,400 d. $224,000
At the end of 2020, Magenta Manufacturing Company discovered that construction cost had been capitalized as a cost of the factory building in 2015 when it should have been treated as a cost of production equipment installation costs. As a result of the misclassification, the depreciation through 2018 was understated by 110,000, and depreciation for 2019 was understated by 90,000. What would be the consequences of correcting for the misclassification of the property cost? a. The taxpayer uses the FIFO inventory method, and 25% of goods produced during the period were included in the ending inventory. b. The taxpayer uses the LIFO inventory method, and no new LIFO layer was added during 2019.
In March 2019, Helen Carlon acquired used equipment for her business at a cost of 300,000. The equipment is five-year property for regular tax depreciation purposes. a. If Helen depreciates the equipment using the method that will produce the greatest deduction for 2019 for regular income tax purposes, what is the amount of the AMT adjustment? b. Draft a letter to Helen regarding the choice of depreciation methods. Helens address is 500 Monticello Avenue, Glendale, AZ 85306.
Sophia purchased the following assets in 2020. 4-15-20 New Computer $2,600 7-02-20 Office Furniture $10,000 10-2-20 Office Equipment $16,200 Sophia does not want to take any 179-expense deduction or any additional first year depreciation. Calculate the cost recovery for 2020.
А. Place an "X" in the blank for the following items which you believe should be included in the cost of a piece of equipment? 1. Purchase price 2. Sales tax 3. Electricity to run the equipment 4. Installation cost 5. Insurance while being transported 6. Insurance while in use 7. Freight charges В. Your company signed a contract to construct a new building so you borrowed $600,000 on February 1, 2021 and issued a three-year, 6% note which pays interest annually. You spent $200,000 for construction on April 1, 2021 and an additional $300,000 on November 1. How much interest should be capitalized in 2021? Please show your calculations. С. Your company spent $30,000 for repairs and modifications to significantly increase the life of your equipment. What entry should be made for the $30,000? D. You bought equipment on January 1, 2018, for $62,000. The equipment has an estimated life of 8 years and an estimated salvage value of $6,000. Your company uses the straight- line method of…
Nathan Construction Inc. has consistently used the percentage-of-completion method of recognizing income. In 2020, Nathan started work on a P6,750,000 fixed price construction contract. The accounting records disclosed the following data for the year ended December 31, 2020: P 2,092,500 4,882,500 2,475,000 1,575,000 Costs incurred Estimated cost to complete Progress billings Collections How much loss should Nathan have recognized in 2020?
< On June 5, 2020, Leo purchased and placed in service a new car that cost $75,000. The business use percentage for the car is always 100%. Leo does not claim any available additional first-year depreciation or any § 179. If required, round your answers to the nearest dollar. Click here to access the depreciation table to use for this problem. Click here to access the limits for certain automobiles. a. What MACRS convention applies to the new car? Half-year b. Is the automobile considered "listed property"? Yes c. Leo's deduction in 2020 is $ and for 2021 is:
What is the effect of the errors on the working capital of 2020? Put a negative sign if the answer is overstated. Example overstated by 5000 is -5000. Bee Company's net income for 2018, 2019, and 2020 were P100,000; P145,000; and P185,000,respectively. The following items were not properly handled: a. Rent of P6,500 for 2021 was received from a lessee on December 31, 2020, and was recorded as outright income in 2020. b. Salaries payable at the end of the following years were omitted: December 31, 2017 2,500 December 31, 2018 5,500 December 31, 2019 7,500 December 31, 2020 4,700 c+ The following unused office supplies were omitted in the accounting records: December 31, 2017 3,500 6,500 December 31, 2018 December 31, 2019 3,700 December 31, 2020 7,100
Blue Corporation, a manufacturing company, decided to develop a new line of merchandise. The project began in 2019. Blue had the following expenses in connection with the project: Salaries Materials Insurance Utilities Cost of inspection of materials for quality control Promotion expenses Advertising Equipment depreciation Cost of market survey Amount of the deduction 2019 Amount of the deduction $500,000 $600,000 70,000 11,000 90,000 8,000 6,000 Amount of the deduction 7,000 11,000 0 15,000 8,000 2020 8,000 2019 6,000 18,000 The new product will be introduced for sale beginning in July 2021. Determine the amount of the deduction for research and experimental expenditures for 2019, 2020, 2021, and 2022. 20,000 If an amount is zero, enter "0". Calculate the monthly expense to the nearest dollar and use in subsequent computations. a. If Blue Corporation elects to expense the research and experimental expenditures, what will the amount of the deduction be? 14,000 0 2020 b. If Blue…
During 2021, a $50,000 loss on the sale of machinery was incorrectly recorded as a factory equipment repair. The error was not discovered until the books were closed and the financial statements were issued for 2022. What adjustment is necessary? Group of answer choices No adjustment is necessary to books or financial statements. Make no entry, but if $50,000 is a material amount, retrospectively adjust the 2021 comparative income statement. Since only income statement accounts are affected, make no entry to the books but recall the 2021 income statement. Record a correction to the books for 2021 and 2022 and recall prior financial statements
Your company purchases a building on a lot on April 2nd 2020, costing a total of $480,000, that includes all preparatory costs. The building on the lot is worth $250,000. Out of desperation and economic conditions that were outside your control, your company then sells the lot and building for $510,000 on January 28th, 2021. Assuming the building is non-residential real property, find the MACRS depreciation for 2020 & 2021: SHOW WORK HERE: 2020: 2021: