Reference no: EM131805753
Problem - Back in Boston, Steve has been busy creating and managing his new company, Teton Mountaineering (TM), which is based out of a small town in Wyoming. In the process of doing so, TM has acquired various types of assets. Below is a list of assets acquired during 2010:
|
Asset
|
Cost
|
Date Place in Service
|
|
Office equipment
|
$10,100
|
2/3/2010
|
|
Machinery
|
646,000
|
7/22/2010
|
|
Used delivery truck*
|
21,700
|
8/17/2010
|
* Not considered a luxury automobile, thus not subject to the luxury automobile limitations
During 2010, TM had huge success (and had no §179 limitations) and Steve acquired more assets the next year to increase its production capacity. These are the assets that were acquired during 2011:
|
Asset
|
Cost
|
Date Place in Service
|
|
Computers & info. system
|
$64,000
|
3/31/2011
|
|
Luxury auto†
|
$83,000
|
5/26/2011
|
|
Assembly equipment
|
$437,500
|
8/15/2011
|
|
Storage building
|
$484,000
|
11/13/2011
|
† Used 100 percent for business purposes.
TM did extremely well during 2011 by generating a taxable income before any §179 expense of $1,105,000.
Required -
a. Compute maximum 2010 depreciation deductions including §179 expense (ignoring bonus depreciation).
b. Compute maximum 2011 depreciation deductions including §179 expense (ignoring bonus depreciation).
c. Compute maximum 2011 depreciation deductions including §179 expense (ignoring bonus depreciation) but now assume that Steve acquired a new machine on October 2 for $426,500 plus $5,000 for delivery and set up costs.
d. Ignoring part (c), now assume that during 2011, Steve decides to buy a competitor's assets for a purchase price of $482,200. Steve purchased the following assets for the lump-sum purchase price.
|
Asset
|
Cost
|
Date Place in Service
|
|
Inventory
|
$21,250
|
9/15/2011
|
|
Office furniture
|
50,250
|
9/15/2011
|
|
Machinery
|
71,500
|
9/15/2011
|
|
Patent
|
134,500
|
9/15/2011
|
|
Goodwill
|
4,200
|
9/15/2011
|
|
Building
|
177,000
|
9/15/2011
|
|
Land
|
23,500
|
9/15/2011
|
|
Calculate the arithmetic average returns and the variances
: Calculate the arithmetic average returns, the variances, and the standard deviations for X and Y. (Do not round intermediate calculations.
|
|
Maker of disposable socks
: A share of Sox- a maker of disposable socks - is expected to pay a dividend of $1.25 next year. The dividend is expected to grow 5% each year thereafter
|
|
Prepaid expense account includes a three-year insurance
: The Prepaid Expense account includes a three-year insurance policy purchased and recorded on January
|
|
Importance of luther german translation
: Describe some of the efforts to translate the Bible into English. What was the importance of Luther's German translation?
|
|
Compute maximum depreciation deductions
: Steve acquired more assets the next year to increase its production capacity. Compute maximum 2010 depreciation deductions including §179 expense
|
|
Effect of the policies be on inflation and employment
: What can the fiscal policy makers do to move the economy from your answer in (b) back to full employment?
|
|
Compute the equivalent units of materials labor and overhead
: Superior Micro Products uses the weighted-average method. Compute the equivalent units of materials, labor, and overhead in the ending inventory for the month.
|
|
Current situation of transportation market
: Since Uber has entered the transportation market, taxi services have declined significantly. Using economic terms, explain why might that be the case
|
|
Calculate the firms total profit
: Using your own piece of graph paper, draw a graph of the firm's demand, marginal revenue, marginal cost, and average total cost curves.
|