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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 = $494.000 The asset qualifies for a 50% special depreciation allowance (Table 17-4). Basis for depreciation = 494.000 (100% -50%) = $247,000 b. 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

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Contemporary Mathematics for Busin...

8th Edition
Robert Brechner + 1 other
Publisher: Cengage Learning
ISBN: 9781305585447
BuyFind

Contemporary Mathematics for Busin...

8th Edition
Robert Brechner + 1 other
Publisher: Cengage Learning
ISBN: 9781305585447

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Chapter
Section
Chapter 17.II, Problem 1RE
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 = $494.000

The asset qualifies for a 50% special depreciation allowance (Table 17-4).

Basis for depreciation = 494.000 (100% -50%) = $247,000

b. 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

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Chapter 17 Solutions

Contemporary Mathematics for Business & Consumers
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