Intermediate Accounting: Reporting And Analysis
3rd Edition
ISBN: 9781337788281
Author: James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher: Cengage Learning
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Required information
[The following information applies to the questions displayed below.]
Dain's Diamond Bit Drilling purchased the following assets this year.
Asset
Purchase Date
Drill bits (5-year)
Mar-08
Original
Basis
$ 92,300
Drill bits (5-year)
Jul-11
Commercial building
Jun-15
97,300
266,000
Assume its taxable income for the year was $76,000 for purposes of computing the §179 expense (assume no bonus
depreciation). (Use MACRS Table 1, Table 2, Table 3, Table 4, and Table 5.)
Note: Leave no answer blank. Enter zero if applicable.
c. If the January drill bits' original basis was $2,898,000, what is the maximum amount of $179 expense Dain's may deduct for the year?
$179 expense](https://content.bartleby.com/qna-images/question/d5453d09-ff35-4159-bf4e-561c8692d773/7c27ccd0-2be7-46d3-829e-e7bf4b8f290f/6b3eq6h_processed.jpeg)
Transcribed Image Text:!
Required information
[The following information applies to the questions displayed below.]
Dain's Diamond Bit Drilling purchased the following assets this year.
Asset
Purchase Date
Drill bits (5-year)
Mar-08
Original
Basis
$ 92,300
Drill bits (5-year)
Jul-11
Commercial building
Jun-15
97,300
266,000
Assume its taxable income for the year was $76,000 for purposes of computing the §179 expense (assume no bonus
depreciation). (Use MACRS Table 1, Table 2, Table 3, Table 4, and Table 5.)
Note: Leave no answer blank. Enter zero if applicable.
c. If the January drill bits' original basis was $2,898,000, what is the maximum amount of $179 expense Dain's may deduct for the year?
$179 expense
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