346 homework5 - Intro The worksheets that follow provide...

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Unformatted text preview: Intro The worksheets that follow provide pro forma workpapers to help you solve the assigned homework problems. They organize your solution in a manner that is consistent with the analytical methods that we discuss in class and allow you to focus on the technical issues, rather than workpaper techniques and computer skills. However, you should continuously analyze the organization of the solution and the answers that you receive, as you work the problems. That is the only way that you will learn the skills and techniques that you will need for your long-term success. Click on the appropriate tab below to move to the worksheet for the homework problem that you want to work on. Once you have completed the assignment, save the file to your computer, then submit it in the manner prescribed in the course syllabus. NOTE: Cells with red dots in them contain notes that provide additional information about the cell contents. Double click on those cells to read the notes. Also, you need enter information only in the cells that are highlighted in bright yellow. Capital Recovery Intro Capital Recovery Intro Capital Recovery Intro Capital Recovery Problem 7-40 Domestic Production Gross Receipts Less: Cost of Goods Sold Other Direct Costs Allocated Indirect Costs Qualified Production Activities Income per Unit Skirt $ 12.00 Blouse $ 10.00 Total $ 22.00 $ $ $ $ $ $ $ $ $ 11.00 $ $ 6.00 $ 5.00 5.00 1.00 6.00 6.00 5.00 (1.00) Problem 7-41 Taxable Income Limitation QPAI TI Limitation % Limitation Amount W-2 Wages Limitation W-2 Wages Limitation % Limitation Amount DPAD $ $ $ 4,000,000 3,000,000 9% $ 270,000 (a) $ 200,000 (b) $ 200,000 400,000 50% Cost Recovery Problem 8-36 Quarter Purchases by Quarter Percentages by Quarter 1 $ $ 0% 2 40,000 $ 27% 3 40,000 $ 27% 4 70,000 47% Cost Recovery Deductions §§168(k) & 179 Furniture Total Cost Recovery per §179 Recovery per §168(k) Basis for MACRS $ 40,000 - $ 40,000 - 7,140 7,140 - 6,000 6,000 - 3,500 3,500 - 16,640 16,640 (40,000) Computers Total Cost Recovery per §179 Recovery per §168(k) Basis for MACRS $ 70,000 (70,000) Total Cost Recovery Deductions Check Figure Total - (40,000) Trucks Total Cost Recovery per §179 Recovery per §168(k) Basis for MACRS §168(a) $ 16,640 $ Total 150,000 100% 18% - 2nd Q Sec. 179 Problem 8-42 tax return Maximum §179 Provision §179 Provision Phaseout Floor General rule 179 $ 500,000 $ 2,000,000 reduction Limitation Taxable Income Net Income before Cost Recovery Depreciable Basis- Current Acquisitions Less: Section 179 Provision Less: Section 168(k) Provision Cost Recovery Basis- Current Acquisitions MACRS % MACRS Deduction- Current Acquisitions MACRS Deduction- Past Acquisitions MACRS Deduction- Total Taxable Income before §179 Deduction $ $ $ $ $ $ $ 250,000 $ $ (109,290) 140,710 600,000 (500,000) 100,000 14.29% 14,290 95,000 Carryforward Schedule Section 179 Deduction Carryforward from Previous Years Current Year Section 179 Provision Potential Deduction- Current Year Actual Deduction- Current Year Carryforward Current Year Taxable Income $ $ $ $ $ 500,000 500,000 (140,710) $ 359,290 $ Carryforward Check Figure $ Capital Recovery 359,290 (140,710) - can writeoff depreciation of acquisition cannot over taxable income Capital Recovery Depletion Problem 8-56 Check Figure Gross Income from Mineral Sales Less: Expenses Taxable Income Before Depletion Depletion Cost Depletion Cost of Mineral Deposits Estimated Number of Tons Purchased Cost per Ton Tons Sold Current Year Cost Depletion- Current Year Percentage Depletion Gross Income from Mineral Sales Percentage Depletion % Percentage Depletion $ $ Limitation for TI Before Depletion Percentage Depletion- Current Year $ 12,000,000 $ (5,000,000) $ 7,000,000 $ 10,000,000 250,000 $ 40 writeoff $40 45,000 $ 1,800,000 $ 12,000,000 22% $ 2,640,000 3,500,000 $ 2,640,000 Depletion Deduction Taxable Income $ (2,640,000) $ 4,360,000 Capital Recovery $ 4,360,000 GAAP Writeoff when extracted Capital Recovery ...
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