A company purchased an item that is in the 7-year property class and has a cost basis of $12000. If the company purchased the item in a year that allowed 50% bonus depreciation, how much would the company be allowed to depreciate the asset in year 1 if the balance of the asset basis (after the bonus depreciation is deducted) was depreciated using the MACRS? Report your answer to the nearest dollar. Be sure to include in your answer the sum of both the bonus depreciation and the MACRS depreciation.

A company purchased an item that is in the 7-year property class and has a cost basis of $12000. If the company purchased the item in a year that allowed 50% bonus depreciation, how much would the company be allowed to depreciate the asset in year 1 if the balance of the asset basis (after the bonus depreciation is deducted) was depreciated using the MACRS? Report your answer to the nearest dollar. Be sure to include in your answer the sum of both the bonus depreciation and the MACRS depreciation.

Practical Management Science

6th Edition

ISBN:9781337406659

Author:WINSTON, Wayne L.

Publisher:WINSTON, Wayne L.

Chapter9: Decision Making Under Uncertainty

Section: Chapter Questions

Problem 32P

See similar textbooks

Similar questions

Weismann Company issued 18-year bonds a year ago at a coupon rate of 11 percent. The bonds make semiannual payments and have a par value of $1,000. If the YTM on these bonds is 10 percent, what is the current bond price?
psychic will tell you the sex of the unborn child from any photograph of the mother. Cost is $ 40. If the psychic guesses right he or she is going to keep all the money. But if psychic does not guess right he or she promises to give the $40 back and pay in addition $30 out of her pocket as a compensation for the wrong answer. Assume postage fees for the return mail are zero. Boy Probability is 0.51 and Girl Probability is 0.49. A) Suppose the psychic replies "boy" to all inquiries. In the worst case, everyone who has a girl will ask for her money back. Use the expected value equation to estimate the expected profit per inquiry. B) Suppose that the psychic replies "girl" to all inquiries. What is the expected profit per inquiry? C) Suppose the psychic chooses randomly the sex of the child. For example it may choose "boy" in all inquiries in one day and "girl" in the next day. What is the expected profit per inquiry in this case?
In 2019 Lisa and Fred a married couple had taxable income of $312000, if they were to file seperate returns Lisa would have reported taxable income of $129,000 and Fred would have reported taxable income of 183,000. What is the couple's marriage penaty or benefit?
ABC Corporation has recently given out a nine-month contract to a construction subcontractor. At the end of the first month, it becomes obvious that the subcontractor is not reporting costs according to an appropriate WBS level. ABC Corporation asks the subcontractor to change its cost reporting procedures. The subcontractor states that this cannot be done without additional funding. This problem has occurred with other subcontractors as well. What can ABC Corporation do about this?
A man purchased a house for P425,000. In the first month that he ownedthehouse, he spent P75,000 on repairs and remodelling. Immediately after the housewas remodeled, he was offered P545,000 to sell the house. After some consideration, he decided to keep the house and have it rented for P4,500 per month startingtwomonths after the purchase . He collected rent for 15 months and then sold the housefor P600,000. If the interest rate was 1.5% per month, how much extra money didhemake or lose by not selling the house immediately after it was remodeled?
Paul is the owner of a sport store that specialises in extreme sports such as paragliding and wakeboarding. To entice customers to spend more he has recently launched store credit, subject to approval. Which one of the following is a cost of granting credit that Paul must be aware of? Select one: a. Loss of interest b. Insurance cost c. The loss of customer goodwill d. Loss of flexibility
Janelle acquires a used seven-year class asset on November 3, 2020, for $40,000. She does not elect to expense any of the asset under § 179 or straight-line cost recovery. No election for additional depreciation is made. She sells the asset on December 4, 2021. This is the only asset she acquires in 2019. Determine Janelle’s cost recovery depreciation in 2020 and 2021.
The Drano Plumbing Company form was created by Damon Davis. He determined a net profit of $50 000. He added up the $400,000 shortfall and the $300,000 credit on his Total Financial Sheet Columns and wondered, "Who knows the most probable cause of this disparity?" If that's the case, how should he investigate it?
Assume Clinique expects to sell 3 million ounces of BB cream within the first year after introduction butexpects that half of those sales will come from buyers who would otherwise purchase Clinique’s moisturizer (that is, cannibalized sales). Assuming that Cliniquenormally sells 10 million ounces of moisturizer per year and that the company will incur an increase in fixed costs of $2 million during the first year of production for the BB cream, will the new product be profitable for the company? Refer to the discussion of cannibalization in Appendix 3: Marketing by the Numbers for an explanation of how to conduct this analysis. (AACSB: Written and Oral Communication; Analytical Thinking)
Purchase Discounts It is typically beneficial for companies to take advantage of early-paymentdiscounts allowed on purchases made on credit. To see why this is the case, determine the effectiverate of interest associated with not taking advantage of the early-payment discount for each of thefollowing situations. Assume in each case that payment is made on the 30th day of the billing cycle.Required1. What is the opportunity cost of not taking advantage of the discount associated with purchases madeunder the following terms: 2/10, n/30? (Show calculations.)2. What is the opportunity cost of not taking advantage of the discount associated with purchases madeunder the following terms: 1/10, n/30? (Show calculations.)3. To motivate managers to take early-payment discounts, what is the appropriate accounting treatment forpurchase discounts?
Gloria Hernandez is the controller of a public company. She just completed a meeting with her superior, John Harrison, who is the CFO of the company. Harrison tried to convince Hernandez to go along with his proposal to combine 12 expenditures for repair and maintenance of a plant asset into one amount ($1 million). Each of the expenditures is less than $100,000, the cutoff point for capitalizing expenditures as an asset and depreciating it over the useful life. Hernandez asked for time to think about the matter. As the controller and chief accounting officer of the company, Hernandez knows it’s her responsibility to decide how to record the expenditures. She knows that the $1 million amount is material to earnings and the rules in accounting require expensing of each individual item, not capitalization. However, she is under a great deal of pressure to go along with capitalization to boost earnings and meet financial analysts’ earnings expectations, and provide for a bonus to top…
Your client, Harper Company, has a contractual commitment as apart of a bond indenture to maintain a current ratio of 2.0. If the ratio falls below thatlevel on the balance sheet date, the entire bond becomes payable immediately. In thecurrent year, the client’s financial statements show that the ratio has dropped from 2.6 to2.05 over the past year. How should this situation affect your audit plan?