   Chapter 17.II, Problem 1RE ### Contemporary Mathematics for Busin...

8th Edition
Robert Brechner + 1 other
ISBN: 9781305585447

#### Solutions

Chapter
Section ### Contemporary Mathematics for Busin...

8th Edition
Robert Brechner + 1 other
ISBN: 9781305585447
Textbook Problem

# Ink Masters Printing purchased a new printing press for $660,000 on February 9.2010. The press is used for business 90% of the time. As the accountant for the company, you elected to lake a$100,000 Section 179 deduction. The press also qualified for a special depreciation allowance. (Sec Table 17-4.)a. What was the basis for depreciation of the printing press?Business-use basis = 660.000   ×   .9   =   $594 , 000 Tentative basis = 594.000 - 100,000 =$494.000The asset qualifies for a 50% special depreciation allowance (Table 17-4).Basis for depreciation = 494.000 (100% -50%) = $247,000b. What was the amount of the third year's depreciation using MACRS?Printing presses are in the 7-year property class (Table 17-1).Third-year depreciation = 17.49% (Table 17-2) 247 , 000 × 1749 =$ 43 , 200.30

(a)

To determine

To calculate: The basis for depreciation of Ink Master’s printing press using MACRS when the new printing press purchased cost is $660,000. Explanation Given Information: The new printing press purchased by Ink Masters Printing is$660,000 and the printing press is used 90% of the time for business. For the year 2010, accountant took $100,000 Section 179 deduction. Formula used: The steps to calculate basis for depreciation by MACRS method are as follows: Step 1: a. Calculate the Business-use basis by multiplying business-use percentage of the asset by the original cost as: Business-use basis=Original cost×Businessuse percentage Step 1: b. Calculate the tentative basis by subtracting Section 179 deduction from the Business-use basis as: Tentative basis=Business-use basisSection 179 deduction Step 1: c. Calculate the basis of depreciation by the following formula. Basis for depreciation=Tentative basis(100%Special depreciation allowance percent) Calculation: Consider the new printing press purchased by Ink Masters Printing is$660,000 and the printing press is used 90% of the time for business.

Now, using the above formula, the Business-use basis is:

(b)

To determine

To calculate: The amount of the third years’ depreciation of Ink Master’s printing press using MACRS when the new printing press purchased cost is \$660,000.

### Still sussing out bartleby?

Check out a sample textbook solution.

See a sample solution

#### The Solution to Your Study Problems

Bartleby provides explanations to thousands of textbook problems written by our experts, many with advanced degrees!

Get Started

#### In Exercises 63-68, rationalize the denominator. 67. 1x3

Applied Calculus for the Managerial, Life, and Social Sciences: A Brief Approach

#### For , f′(x) =

Study Guide for Stewart's Multivariable Calculus, 8th

#### Explain how inter-rater reliability is established.

Research Methods for the Behavioral Sciences (MindTap Course List) 