Complete this question by entering your answers in the tabs below.Req AReq CWhat is eSys Answers' basis in each of its assets at the end of Year 2?Adjusted BasisYear 2 Cost Year 2 EndingRecoveryImmediateYear 1 CostOriginalBasisAssetExpenseRecoveryBasis15,00010,0003,0007.00018,0004.00010,000Ti000Computer EquipmentOffice EquipmentFurnitureStart-up costsVanPinball machineCustomer ListTotals< Req AReq C > (The following information applies to the questions displayed below.]While completing undergraduate school work in information systems, Dallin Bourne and Michael Banks decided to start a technologysupport company called eSys Answers. During year 1, they bought the following assets and incurred the following start-up fees:Year 1 AssetsPurchase DateBasisComputers (5-year)Office equipment (7-year)Furniture (7-year)Start-up costsOctober 30, Year 1October 30, Year 1$ 15,00010,000October 30, Year 1October 30, Year 13,00017,000In April of year 2, they decided to purchase a customer list from a company providing virtually the same services, started by fellowinformation systems students preparing to graduate. The customer list cost $10,000, and the sale was completed on April 30. During theirsummer break, Dallin and Michael passed on internship opportunities in an attempt to really grow their business into something they coulddo full time after graduation. In the summer, they purchased a small van (for transportation, not considered a luxury auto) and a pinballmachine (to help attract new employees). They bought the van on June 15, Year 2, for $15,000 and spent $3,000 getting it ready to put intoservice. The pinball machine cost $4,000 and was placed in service on July 1, Year 2.Year 2 AssetsBasis$ 18,000Purchase DateVanJune 15, Year 2Pinball machine (7-year)July 1, Year 2April 30, Year 24,00010,000Customer listAssume that eSys Answers does not claim any §179 expense or bonus depreciation. (Use MACRS Table 1, Table 2, Table 3, Table 4 andTable 5.) (Round your intermediate calculations and final answers to the nearest whole dollar amount.)Required:a. What are the maximum cost recovery deductions for eSys Answers for Year 1 and Year 2?c. What is eSys Answers' basis in each of its assets at the end of Year 2?Complete this question by entering your answers in the tabs below.Req AReq CWhat are the maximum cost recovery deductions for eSys Answers for Year 1 and Year 2?RecoveryDeductionYear 1Year 2

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Complete this question by entering your answers in the tabs below. Req A Req C What is eSys Answers' basis in each of its assets at the end of Year 2? Adjusted Basis Original Basis Year 1 Cost Recovery Year 2 Cost Year 2 Ending Recovery Immediate Asset Expense Basis 15,000 10,000 3000 7.000 18000 4.000 10,000 Ti000 Computer Equipment Office Equipment Furniture Start-up costs Van Pinball machine Customer List Totals < Req A Req C >

Complete this question by entering your answers in the tabs below. Req A Req C What is eSys Answers' basis in each of its assets at the end of Year 2? Adjusted Basis Original Basis Year 1 Cost Recovery Year 2 Cost Year 2 Ending Recovery Immediate Asset Expense Basis 15,000 10,000 3000 7.000 18000 4.000 10,000 Ti000 Computer Equipment Office Equipment Furniture Start-up costs Van Pinball machine Customer List Totals < Req A Req C >

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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