1. Blue Bayou, Inc., purchases the following assets during its 2016 tax year (the fiscal year...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
1. Blue Bayou, Inc., purchases the following assets during its 2016 tax year (the fiscal year beginning 3/1/2016 and ending 2/28/2017): Description Dodge Dart 3/5/2016 $ 18,850 1/16/2017 6/28/2016 7/19/2016 Warehouse building 12/9/2016 Blue Bayou management wishes to take any available "bonus depreciation" on the computers, semi-truck and automobile but not on any other assets. Blue Bayou will not utilize any §179 expensing. Compute the firm's 2016 tax year cost recovery deductions. Computer Equipment Drill Press Kenworth "semi" (used) Description Meat Slicers (5) Date Acquired Walk-in Cooler & Related Cost Office Furniture/Fixtures Canned software for printing delivery maps Delivery Trucks (2-each GVW 9,500 lbs) 2. Steed and Peel, Ltd. (S&P) is a new concept upscale "Sandwich Shoppe" (deli) that opened last year (2016) in the North Scottsdale/Carefree area. Catering (no pun intended) mostly to the overly affluent and largely inert, the shop prepares custom gourmet sandwiches made with premium organic and locally-sourced ingredients. S&P then promptly delivers these concoctions to the homes and offices of its clientele. In its first tax year (calendar 2016), S&P netted $585,000 in profit - it expects to clear well over $825,000 in 2017 (both figures are before any recovery deductions). To help grow the business, S&P acquired the following assets in 2017: Date Acquired 7,500 37,500 86,000 300,000 Cost 3/2/2017 $ 157,500 5/19/2017 300,500 6/22/2017 8/23/2017 10/15/2017 172,000 S&P's owners want to "write-off" everything as quickly as possible and do not want to keep annual depreciation records, if possible. What do you advise them to maximize their 2017 deductions and minimize the record-keeping burden? Please compute the maximum deduction. How might your answers change if all the dates were pushed-ahead several years (i.e. 2019 acquisition dates)? 60,600 4,500 Problem 1 Worksheet: Description Dodge Dart Computer Equipment Drill Press Kenworth "semi" (used) Warehouse building Date Acquired 03/05/16 $ 01/16/17 06/28/16 07/19/16 12/09/16 Total Property Total Personal Property Total Personal Property 4th Quarter Cost 18,850 7,500 37,500 86,000 300,000 $ 449,850 GDS Recovery Period Convention Method Bonus Rate Bonus Deprn. Remaining MACRS Table Basis Rate GDS Recovery Deduction Luxury Auto MACRS Cap Total Allowable Deprn. Scanned by CamS Problem 2 Worksheet: Description Meat Slicers (5) Walk-in Cooler & Related Office Furniture/Fixtures Canned software for printing delivery maps Delivery Trucks (2- each GVW 9,500 lbs) Date Acquired 03/02/17 $ 157,500 05/19/17 06/22/17 08/23/17 10/15/17 Total Property Total Personal Property Total Personal Property 4th Quarter Cost 300,500 60,600 4,500 172,000 $ 695,100 GDS Recovery Period Convention Method $179 Expense Amount Remaining Basis Bonus Rate Bonus Deprn. MACRS Remaining Table Basis Scanned by Ca GDS Recovery Total Rate Deduction Expen 1. Blue Bayou, Inc., purchases the following assets during its 2016 tax year (the fiscal year beginning 3/1/2016 and ending 2/28/2017): Description Dodge Dart 3/5/2016 $ 18,850 1/16/2017 6/28/2016 7/19/2016 Warehouse building 12/9/2016 Blue Bayou management wishes to take any available "bonus depreciation" on the computers, semi-truck and automobile but not on any other assets. Blue Bayou will not utilize any §179 expensing. Compute the firm's 2016 tax year cost recovery deductions. Computer Equipment Drill Press Kenworth "semi" (used) Description Meat Slicers (5) Date Acquired Walk-in Cooler & Related Cost Office Furniture/Fixtures Canned software for printing delivery maps Delivery Trucks (2-each GVW 9,500 lbs) 2. Steed and Peel, Ltd. (S&P) is a new concept upscale "Sandwich Shoppe" (deli) that opened last year (2016) in the North Scottsdale/Carefree area. Catering (no pun intended) mostly to the overly affluent and largely inert, the shop prepares custom gourmet sandwiches made with premium organic and locally-sourced ingredients. S&P then promptly delivers these concoctions to the homes and offices of its clientele. In its first tax year (calendar 2016), S&P netted $585,000 in profit - it expects to clear well over $825,000 in 2017 (both figures are before any recovery deductions). To help grow the business, S&P acquired the following assets in 2017: Date Acquired 7,500 37,500 86,000 300,000 Cost 3/2/2017 $ 157,500 5/19/2017 300,500 6/22/2017 8/23/2017 10/15/2017 172,000 S&P's owners want to "write-off" everything as quickly as possible and do not want to keep annual depreciation records, if possible. What do you advise them to maximize their 2017 deductions and minimize the record-keeping burden? Please compute the maximum deduction. How might your answers change if all the dates were pushed-ahead several years (i.e. 2019 acquisition dates)? 60,600 4,500 Problem 1 Worksheet: Description Dodge Dart Computer Equipment Drill Press Kenworth "semi" (used) Warehouse building Date Acquired 03/05/16 $ 01/16/17 06/28/16 07/19/16 12/09/16 Total Property Total Personal Property Total Personal Property 4th Quarter Cost 18,850 7,500 37,500 86,000 300,000 $ 449,850 GDS Recovery Period Convention Method Bonus Rate Bonus Deprn. Remaining MACRS Table Basis Rate GDS Recovery Deduction Luxury Auto MACRS Cap Total Allowable Deprn. Scanned by CamS Problem 2 Worksheet: Description Meat Slicers (5) Walk-in Cooler & Related Office Furniture/Fixtures Canned software for printing delivery maps Delivery Trucks (2- each GVW 9,500 lbs) Date Acquired 03/02/17 $ 157,500 05/19/17 06/22/17 08/23/17 10/15/17 Total Property Total Personal Property Total Personal Property 4th Quarter Cost 300,500 60,600 4,500 172,000 $ 695,100 GDS Recovery Period Convention Method $179 Expense Amount Remaining Basis Bonus Rate Bonus Deprn. MACRS Remaining Table Basis Scanned by Ca GDS Recovery Total Rate Deduction Expen
Expert Answer:
Answer rating: 100% (QA)
SOLUTION For Bayou Inc The cost recovery deductions for 2016 tax year are as follows Dodge Dart 3770 20 of 18850 Computer Equipment 2250 30 bonus depreciation Drill Press 5625 15 of 37500 Kenworth sem... View the full answer
Related Book For
Essentials of Accounting for Governmental and Not-for-Profit Organizations
ISBN: 978-0073527055
10th Edition
Authors: Paul A. Copley
Posted Date:
Students also viewed these accounting questions
-
Worker participation in management is a new concept that involves employees in corporate decision making. The following data are the percentages of employees involved in worker participation programs...
-
The capital recovery concept is both an income concept and a deduction concept. Explain how the application of the concept differs for income items and deduction items.
-
Custom Cookies produces gourmet cookies with company logos for special promotions. The cookies are customized with the customers choice of shape, color, flavor, and decorations. Custom Cookies uses a...
-
Suppose that today, you paid $1,000 for the bond described in Problem 8 of Chapter 8, The net present value functions: NPV and XNPV. What would be the bonds IRR? A bonds IRR is often called the yield...
-
Using the chart of accounts numbering system, develop a chart of accounts that assigns an account number to each of the following accounts: a. Buildings b. Interest Revenue c. Bob Norton, Withdrawals...
-
The water of the Dead Sea is extremely salty, which gives it a very high density of \(1240 \mathrm{~kg} / \mathrm{m}^{3}\). Explain why a person floats much higher in the Dead Sea than in ordinary...
-
Consider unsteady flow in the constant diameter, horizontal pipe shown in Fig. P5.67. The velocity is uniform throughout the entire pipe, but it is a function of time: \(\mathbf{V}=u(t)...
-
Use the information contained below to compress one time unit per move using the least cost method. Reduce the schedule until you reach the crash point of the network. For each move identify what...
-
How can Forensic psychology be used in a criminal investigation? What is the history of Forensic psychology and how it has evolved? Why is Forensic Psychology an important resource to law enforcement...
-
Your company is competing for business in the toy robot industry Prepare a sales, production, direct materials, and direct labor budget based on the following assumptions Assumptions Q1 Q2 Q4 1....
-
Gem Swap owns a mine that is expected to produce 5 million gems of similar shape and quality. After 3 years of operations, 3 million gems had been extracted, and the carrying amount of the asset was...
-
Replying to this discussion post , The difference between institutionalized racism and individualistic racism, ststemic racism exists within institutions and orgganizations across society. It refers...
-
1. Browse the Web for one virtual assistant position. Share a brief overview of the position and the salary offered/expected. List what you feel are the pros and cons of this remove work position. 2)...
-
How do demographic shifts, such as aging populations and increased migration, reshape social dynamics, and what policies can be implemented to manage the associated challenges and opportunities ?
-
A plane must fly due East for a distance of 640 km. However, there is a 55 km/h wind directed towards the South. The plane can travel at a maximum speed of 180 km/h in still air. Using a vector...
-
(Force on curved surface) A gate in the form of a partial cylindrical surface (called a Tainter gate) holds back water on top of a dam as shown in the figure below. The radius of the surface is 20...
-
1. The rigid bar AD is supported by two steel wires of 1/16-in. diameter (E = 29x106 psi) and a pin and bracket at D. Knowing that the wires were initially taut, determine (a) the addi- tional...
-
Rewrite Programming Exercise 7.5 using streams. Display the numbers in increasing order. Data from Programming Exercise 7.5 Write a program that reads in 10 numbers and displays the number of...
-
The following information is available for the preparation of the government-wide financial statements for the City of Southern Springs as of April 30, 2012: Cash and cash equivalents, governmental...
-
The New City College reported deferred revenues of $607,000 as of July 1, 2011, the first day of its fiscal year. Record the following transactions related to student tuition and fees and related...
-
During 2011, the following transactions were recorded by the Baton Rouge Community Hospital, a private-sector, not-for-profit institution. 1. Gross charges for patient services, all charged to...
-
Suppose the output price falls from \($5\) to \($4\) to \($3\) to \($1\) in exercise 2. How would that change your answers to exercises 2 and 3? Data from in exercise 2 Using the information in the...
-
Using the data in exercise 2, calculate the marginal factor cost. Data from in exercise 2 Using the information in the following table, calculate the marginal revenue product (MRP = MPP MR). Unit of...
-
Suppose the resource price rises from \($10\) to \($12\) to \($14\) to \($18\) to \($20\) as resource units go from 1 to 5. How would that change your answer to exercise 5? How would it change your...
Study smarter with the SolutionInn App