Reference no: EM131296148
LRRR Corporation, a calendar year C corporation, purchased and placed in service the following new assets on the following dates:
Date Assets
6/20/2016 Computers 700,000
9/15/2016 Copiers 800,000
10/15/2016 Office Equipment 1,100,000
Asset Cost Computers $700,000 Copiers $800,000 Office Equipment $1,100,000
LRRR Corporation purchased no other assets during 2016 and its net income for 2016 is $2,000,000 before taking cost recovery deductions into account.
a. What is the maximum federal cost recovery deduction LRRR Corporation may take on the assets listed above in 2016? Please show your work and explain your calculations.
b. What is the maximum federal cost recovery deduction LRRR Corporation may take on the assets listed above in 2017? Please show your work and explain your calculations.
b. If LRRR Corporation sold only the copiers on September 30, 2018, what would LRRR Corporation’s federal cost recovery deduction be on the copiers in 2018? (You do not need to calculate the federal cost recovery deduction on the computers or on the office equipment in 2018.) Please show your work and explain your calculations.
4. Assume that LRRR Corporation (see Question 3 above) also purchased and placed in service a new office building for $2,000,000 on July 31, 2016. The land was allocated $500,000 and the building was allocated $1,500,000 of the purchase price.LRRR Corporation plans to use the office building until October of 2020, when it will move to a larger office building.
What is the maximum tax cost recovery deduction LRRR can take on the office building in 2016? Please show your work and explain your calculations.
What is the maximum tax cost recovery deduction LRRR Corporation can take on the office building in 2017 through 2019? Please show your work and explain your calculations.
c. What is the maximum tax cost recovery deduction LRRR Corporation can take on the office building in 2020, assuming it sells the office building on October 1, 2020? Please show your work and explain your calculations.
|
Prepare journal entries to record each of these transactions
: Kohler Corporation reports the following components of stockholders’ equity on December 31, 2015: Common stock—$15 par value, 100,000 shares authorized, 50,000 shares issued and outstanding $ 750,000 Paid-in capital in excess of par value, Prepare jo..
|
|
Differences in culture-social values-political systems
: How do differences in culture, social values, political systems, technology and economic systems impact mergers/acquisitions in this global environmental?
|
|
Cash flow statement categories
: Cash flow statement categories. Classify the transactions into the best of these five categories. Exchange of furniture for office equipment. Purchase of treasury stock. Decrease in accounts payable during the year.
|
|
Differences in culture-social values-political systems
: How do differences in culture, social values, political systems, technology and economic systems impact mergers/acquisitions in this global environmental?
|
|
What is the maximum federal cost recovery deduction
: LRRR Corporation, a calendar year C corporation, purchased and placed in service the following new assets on the following dates: What is the maximum federal cost recovery deduction LRRR Corporation may take on the assets listed above in 2016? Please..
|
|
Cash flow statement categories
: Cash flow statement categories. Classify the transactions into the best of these five categories. Exchange of furniture for office equipment. Purchase of treasury stock. Decrease in accounts payable during the year.
|
|
Contingent liability can be reasonably estimated
: When the amount of a contingent liability can be reasonably estimated and its likehood is possible but not probable, the company should:
|
|
Levels of sales is in the operating profit area
: For the coming year, Loudermilk Inc. anticipates fixed costs of $600,000, a unit variable cost of $75, and a unit selling price of $125. The maximum sales within the relevant range are $2,500,000. Construct a cost-volume-profit chart on a sheet of pa..
|
|
Differences in income for financial statement-tax purposes
: Davo Inc. began operations in January 2013. For certain of its property sales, Davo recognizes income in the period of sale for financial reporting purposes. However, for income tax purposes, Davo recognizes income when it collects cash from the buye..
|