Please read all instructions carefully before you get started on this assignment!

ABC Corp is a calendar year accrual method entity for financial reporting and tax purposes and has

provided the attached income statement for its operations ending on December $31,2021.$ For book

purposes, ABC uses the straight$-$line method for depreciation and amortization over the useful life of

the asset. Up to this point, ABC Corp has never elected to use either Section $179$ or bonus

depreciation deductions for tax purposes. For the purpose of this assignment, assume a flat federal

income tax rate of $21\%.$

using the income statement and the additional information, calculate ABC Corps taxable income

Compute taxes Payable

Compute any remsining section $179$deduction carryforward

On September $1$st of $2019,$ ABC Corp purchased a business for $$965,000.$ The acquired business only had two assets: a patent with a FMV of

$$180,000$ and Machine $2,$ which had a FMV of $$740,000.$ At the time of the purchase, the patent had a $12$ year useful life remaining and no

residual value while Machine #$2$ had a $10$ year useful life remaining and a $$60,000$ residual value. Machine #$2$ is a $7$ year recovery period asset for

tax purposes.

On April $1$st of $2022,$ABC purchased a $7,500$ pound service truck to aid operations. The truck cost $$77,000$ and has an estimated useful life of $7$

years and a $$20,000$ residual value. For tax purposes, the truck is a $5$ year recovery period asset.

On January $1$st of $2023,$ABC purchased a new luxury car for the CEO to use. The car cost $$90,000$ and has an estimated useful life of $4$ years and a

$$8,000$ residual value. For tax purposes, the car is a $5$ year recovery period asset.

On July $1$st of $2024,$ ABC purchased Machine #$3$ for $$1,370,000.$ Machine #$3$ has a $5$ year useful life and a $$75,000$ residual value, but is a $7$ year

recovery period asset for tax purposes. ABC elects to take a much Section $179$ and bonus depreciation deduction as possible.

Average gross receipts for XYZ Corp have exceeded $$35,000,000$ over the last five years.