T11F-Chp-10-2-HW-Prb-Deprec

T11F-Chp-10-2-HW-Prb-Deprec -...

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bb005ade37b507ab67535140d91d7637aa56ce46.doc. Page 1 of 2 Name: Home work-Chapter 10. The current year is 2011, unless otherwise indicated. Transactions are in 2011, except where another year is indicated. 1 It is necessary to estimate the useful life of the asset if depreciation is being computed for: a. Financial Statements b. Tax return c. Both 2 An accountant is preparing a 2011 income tax return and is computing depreciation for an asset acquired in 2008. The depreciation should be computed using the tax law in effect for: a. 2008 b. 2011 c. Either year 3 Gorman Corporation places $1,200,000 of Section 179 property in service for use in its business. What is the amount of Gorman's maximum Section 179 deduction for 2011 (use textbook info) a. $200,000 b. $1,200,000 c. $1,000,000 d. $128,000 e. $500,000 4 Sawback Corporation purchases a new machine for $2,200,000 on July 1, 2011. No other fixed assets are placed in service in 2011. Sawback has taxable income of $3,000,000 (before depreciation) and desires to minimize taxable income. How much can Sawback deduct under Section 179? a. $200,000 b. $1,200,000 c. $1,000,000 d. $500,000 e. $300,000 5 Witt Processing Corporation places $600,000 of Section 179 property in service for use in its business. What is the amount of Witt Processing's maximum Section 179 deduction for the current year? a. $64,000 b. $125,000 c. $500,000 d. $235,000 e. $500,000 6 Henry purchases $200,000 of equipment. The taxable income of the business is $30,000 [before sec. 179 deduction]. What is Henry's maximum Section 179 deduction for the current year? a. $ - 0 - b. $ 30,000 c. $128,000 d. $180,000 e. $200,000 7 What is the MACRS recovery period for an office desk? a.
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T11F-Chp-10-2-HW-Prb-Deprec -...

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