On June 1, 2020, Irene plačes in is used 70% for business and 30% for personal use. (Assume this percentage is maintained for the life of the car). She does not take additional first-year depreciation but instead uses the 5-year (200% DB). Determine the cost recovery deduction for 2020 and 2021.

On June 1, 2020, Irene plačes in is used 70% for business and 30% for personal use. (Assume this percentage is maintained for the life of the car). She does not take additional first-year depreciation but instead uses the 5-year (200% DB). Determine the cost recovery deduction for 2020 and 2021.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Related questions

Q: On April 5, 2021, Kinsey places in service a new passenger automobile that cost $60,000. The car is…

A: Depreciation is an accounting method for dispersing a tangible or physical asset's cost over its…

Q: An asset (not an automobile) put in service in June 2019 has a depreciable basis of $535,000 and a…

A: Depreciable basis on how much value of asset depreciation is to be charged and MACRS is Modified…

Q: Mackey purchased a used van for use in its business on January 1, 2020. It paid $15,000 for the van.…

A: Depreciation Expenses are the expense incurred on the fixed assets of the company. These are…

Q: Alex purchased an E Class Mercedes Benz car and will be use 60% for business purpose on 1 May, 2019…

A: Prime Cost method: It is known as straight-line depreciation method. Depreciation records the usage…

Q: An asset (not an automobile) put in service in June 2020 has a depreciable basis of $1,055,000, a…

A: but subject to the amount of taxable income

Q: El Tapitio purchased restaurant furniture on September 1, 2024, for $37,000. Residual value at the…

A: The depreciable cost of the furniture can be calculated as follows: Cost of furniture = $37,000…

Q: Taylor LLC purchased an automobile for $55,000 on July 5, 2019. What is Taylor's maximum…

A: Depreciation is a non-cash expense.Depreciation is charged on fixed asset over a estimated useful…

Q: Pleasant Planes Co. purchased a new jet on January 1, 2019 for $5,000,000. Pleasant Planes Co.…

A: Calculation of Depreciation Expense for 2019 Depreciation Expense for 2019 = Number of miles flew in…

Q: On April 1, 2024, Titan Corporation purchases office equipment for $74,000. For tax reporting, the…

A: MACRS: Modified Accelerated Cost Recovery System is a method of depreciation for federal income tax…

Q: On May 31, 2021, Javier Sanchez purchased and placed in service a new 7-year class asset costing…

A: Depreciation is the measure of a decrease in the monetary value of an asset. The value of an asset…

Q: Tom's business has a preliminary Schedule C income of $400,000 so she would fike to see if she can…

A: The deduction reduces the tax amount.

Q: On 1 Jan 2020, Company A purchased a vehicle costing $21,000. A certain vehicle upgrade of $3,000…

A: Depreciation means the loss in value of assets because of usage of assets , passage of time or…

Q: on 1 july 2019 francine bought a new security alarm system for her shop. the total sost for the…

A: Answer R= {1 – (s/c)^1/n } x 100 Where R = Rate of Depreciation (in %)n = Remaining useful life of…

Q: equired: With reference to relevant legislation and case law, discuss and calculate what amount is…

A: Introduction: Depreciation: Depreciation is a charge on the fixed assets that reduces its value.…

Q: 1. Shay Enterprises purchased equipment on March 18, 2018, at a cost of $40,000. The equipment was…

A: Depreciation can be referred to as a decline in the value of asset due to its usage in the normal…

Q: Kansas Enterprises purchased equipment for $77,000 on January 1, 2021. The equipment is expected to…

A: Formula:

Q: In 2020, Sandstorm Corporation incurs $25,000 in research and experimental expenses. Benefits from…

A: 174 - Research and experimental expenditures (a)Treatment as expenses A taxpayer may treat…

Q: At the beginning of 2021, Crane Co. purchased an asset for $1200000 with an estimated useful life of…

A: The correct answer is $978000$720000

Q: On January 1, 2020, PT C purchased a car from PT D for IDR 300,000,000 which will be used for office…

A: Depreciation: Decreasing value of fixed assets over its useful life period called as depreciation.…

Q: Cadillac Construction Company uses the retirement method to determine depreciation on its small…

A: Journal Entry: Journal entry is the act of keeping records of transactions in an accounting journal.…

Q: Design Pro purchased on October 1, 2022. $175,000 of furniture that was put into service on November…

A: The annual depreciation method refers to the systematic allocation of the cost of a tangible asset…

Q: Gina Corporation purchases new office equipment for $2,500,000 on January 1, 2020. Gina estimates…

A: Depreciation: Depreciation means the reduction in the value of an asset over the life of the assets…

Q: Spike purchased on 6/15/2022 and placed in service on 9/1/2022 a new warehouse for $5,000,000. (a)…

A: Cost recovery deduction refers to a tax deduction that businesses and individuals can claim for the…

Q: Kansas Enterprises purchased equipment for $75,000 on January 1, 2021. The equipment is expected to…

A: Solution: Depreciation rate - SLM = 1/5 = 20% Depreciation rate - Double declining balance method =…

Q: Cutter Enterprises purchased equipment for $99,000 on January 1, 2021. The equipment is expected to…

A: An accelerated depreciation method of calculation is called the double-declining balance (DDB)…

Q: On June 1, 2021, Sandalwood Corporation purchases a passenger automobile for 100 percent use in its…

A: Determination of adjusted basis of the asset placed in service applying for bonus depreciation.…

Q: John purchased equipment for $60,000 on January 1,2021. The equipment is expected to have a five…

A: Straight Line Method Depreciation expense = (Original cost - Salvage Value)/ Number of years of…

Q: On April 1, 2024, Titan Ca classifies the equipment

A: Straight line depreciation is the standard method for recognizing the carrying amount of a fixed…

Q: On April 1, 2024, Titan Corporation purchases office equipment for $64,000. For tax reporting, the…

A: Modified Accelerated Cost Recovery System is a method of depreciation for federal income tax…

Q: Jim Fleur purchased equipment on April 1, 2020, for $90,000. The equipment is expected to have a…

A: Straight line method of depreciation is that method in which cost of the asset is depreciated over…

Q: During 2021, Pepe Guardio purchases the following property for use in his calendar year-end…

A: The solution is based on the MACRS general depreciation system (GDS), and all assets are non-farm…

Q: chinery and equipment (seven-year property) with a basis of $3,464,500 on June 6, 2020. Assume that…

A: As per Section 179, the maximum allowable deduction expense for 2020 is $1,040,000

Q: Suppose that a company purchases a computer to be used in the manufacturing department at the…

A: Depreciation under accelerated depreciation method for 2019: Depreciation…

Q: On January 1, 2019, Williams Company purchased a copy machine. The machine costs $160,000, its…

A: Depreciation Expenses - Depreciation Expenses are the expense incurred on the wear and tear of the…

Q: Gina Corporation purchases new office equipment for $2,500,000 on January 1, 2020. Gina estimates…

A: Depreciation: Depreciation means the reduction in the value of an asset over the life of the assets…

Q: On October 1, 2019, Jefferson Consulting purchased new computers for $13,820. The computers are…

A: Answer Computation of Depreciation on computer equipments

Q: A piece of newly purchased industrial equipment costs $980,000 and is classified as seven-year…

A: Modified Accelerated Cost Recovery System (MACRS) is a tax depreciation method.Depreciation…

Q: Sally Kremer purchased a computer for $9,120 on July 1, 2020. She intends to depreciate it over 4…

A: Assuming cost of asset = 100 % Depreciation per annum under Straight line method = 100%/4 years =…

Q: Calculate the vehicle deduction for 2021 Income Tax purposes when the UCC on a class 10 vehicle was…

Q: Modified Accelerated Cost Recovery System (MACRS), Listed Property, Limitation on Depreciation of…

A: MACRS Depreciation: It is a standard depreciation method calculated for the purpose of federal…

Q: During 2020, the Hackett Corporation purchased the property listed in the table below for use in its…

A: The Modified accelerated cost recovery system (MACRS) is used to depreciate most of the properties…

Question

100%

On June 1, 2020, Irene places in service a new automobile that cost $45,000. The car
is used 70% for business and 30% for personal use. (Assume this percentage is
maintained for the life of the car). She does not take additional first-year
depreciation but instead uses the 5-year (200% DB). Determine the cost recovery
deduction for 2020 and 2021.

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

This is a popular solution!

SEE SOLUTION Check out a sample Q&A here

Step 1

VIEW

Step 2

VIEW

Trending now

This is a popular solution!

Step by step

Solved in 2 steps with 2 images

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.

Similar questions

In March 2020, Jones Company purchased a Mercedes for use in its business at a cost of $73,000. Required: Assuming no bonus depreciation or Section 179 deduction, calculate the allowable tax depreciation on this asset for 2020, 2021, and 2022. Use Table 7-1 and Table 7-2. Use the below table for annual depreciation deduction for year 2020 to 2022: 2020 $ 10,100 2021 16,100 2022 9,700 2023 and subsequent years 5,760
please answer do not image.
H1. Account
Dinesh Bhai
On February 17, 2021, Brecken places in service an automobile that cost $23,000. Assume Brecken does not claim the additional first-year or any § 179 deduction. The auto is used 35% for business and 65% for personal use. Assume the luxury automobile limitations for Year 1 is $10,100. Click here to access the depreciation table to use for this problem. a. Compute the total depreciation allowed for 2021: b. Assume that the automobile cost $45,000. Compute the total depreciation allowed for 2021:
On April 1, 2024, Titan Corporation purchases office equipment for $50,000. For tax reporting, the company uses MACRS and classifies the equipment as 5-year personal property. In 2024, this type of equipment is eligible for 60% first-year bonus depreciation. For financial reporting, the company uses straight-line depreciation. Assume the equipment has no residual value.Required: Calculate annual depreciation for the five-year life of the equipment according to MACRS. The company uses the half-year convention for tax reporting purposes.Calculate annual depreciation for the five-year life of the equipment according to straight-line depreciation. The company uses partial-year depreciation based on the number of months the asset is in service for financial reporting purposes. In which year(s) is tax depreciation greater than financial reporting depreciation?
The maximum depreciation deduction allowed in 2018 for a luxury automobile placed in service in 2018 (used 100% for business) on which bonus depreciation is claimed is 3160. True or false.
SINCO Ltd. purchased a piece of equipment in the year 2018 for the sum of $ 200,000. The company is subject to a tax depreciation rate of 25%. According to the following table, what is the depreciation allowance that this company can claim in 2020? (in the following picture : Année is year)
The Costanza Corporation purchased some equipment August 1, 2021 for $17,040 and expects to use it for 8 years at which time it can be sold for an estimated $1,200. How much depreciation expense would be recorded in the company's 2021 financial statements?
Arlington LLC purchased an automobile (5-year property) for $74,000 on July 5, 2020. What is Arlington's depreciation deduction for 2020 if its business-use percentage is 73 percent? (Ignore any possible bonus depreciation.)
Arlington LLC purchased an automobile for $76,000 on July 5, 2021. What is Arlington's depreciation deduction for 2021 if its business-use percentage is 76 percent? (lgnore any possible bonus depreciation.) (Use Exhibit 10-10.) Multiple Choice $5,825 $7,600 $7,676 $11,400 None of the choices are correct.
During 2019 and 2020, Faulkner Manufacturing used the sum-of-the-years'-digits (SYD) method of depreciation for its depreciable assets, for both financial reporting and tax purposes. At the beginning of 2021, Faulkner decided to change to the straight-line method for both financial reporting and tax purposes. A tax rate of 25% is in effect for all years. For an asset that cost $21,000 with an estimated residual value of $1,000 and an estimated useful life of 10 years, the depreciation under different methods is as follows: Year 2019 2020 Straight Line $2,000 2,000 $4,000 SYD $3,636 3,273 $ 6,909 Difference $1,636 1,273 $ 2,909 Required 1. Prepare the journal entry that Faulkner will record in 2021 related to the change. 2. Suppose instead that Faulkner previously used straight-line depreciation and changed to sum-of-the-years'- digits in 2021. Prepare the journal entry that Faulkner will record in 2021 related to the change.