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Question # 00004762
Subject: General Questions
Due on: 12/31/2013
Posted On: 12/06/2013 02:43 AM

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91. Olney LLC placed in service on July 19, 2011 machinery and equipment (7-year property) with a basis

of $850,000. Assume that Olney has sufficient income to avoid any limitations. Calculate the maximum

depreciation expense including section 179 expensing, rounded to the nearest whole number (but ignoring

bonus expensing):

92. Columbia LLC placed in service on October 9, 2011 machinery and equipment (7-year property) with a

basis of $2,150,000. Assume that Columbia has sufficient income to avoid any limitations. Calculate the

maximum depreciation expense including section 179 expensing (but ignoring bonus expensing) for the

year, rounded to the nearest whole number:

93. In 2011, Northern LLC placed in service on September 6th machinery and equipment (7-year property)

with a basis of $2,200,000. Assume that Northern has sufficient income to avoid any limitations.

Calculate the maximum depreciation expense including section 179 expensing (ignore any potential

bonus expensing), rounded to the nearest whole number.

94. Assume that Reid has 2011 taxable income of $150,000 before any §179 expense and acquired the

following assets: he placed in service computer equipment (5-year property) on August 6th with a basis

of $100,000 and machinery (7-year property) on November 9th with a basis of $100,000. Calculate the

maximum depreciation expense including section 179 expensing (but not bonus expensing).

95. Phyllis purchased $8,000 of specialized audio equipment that she uses in her business regularly.

Occasionally, she uses the equipment for personal use. During the first year, Phyllis used the equipment

for business use 70 percent of the time; however, during the current (second) year the business use fell

to 40 percent. Assume that the equipment is seven-year MACRS property and is under the half-year

convention. Assume the ADS recovery period is 10 years. What is the depreciation allowance for the

current year, rounded to the nearest whole number?

96. Alexandra purchased a $35,000 automobile during 2011. The business use was 70 percent. What is the

allowable depreciation for the current year?

97. Assume that Yuri acquires a competitor's assets on May 1st. The purchase price was $500,000. Of the

amount, $325,000 is allocated to tangible assets and $175,000 is allocated to goodwill (a §197 intangible

asset). What is Yuri's amortization expense for the current year, rounded to the nearest whole number?

98. Assume that Cannon LLC acquires a competitor's assets on June 15th of a prior year. The purchase price

was $450,000. Of the amount, $196,200 is allocated to tangible assets and $253,800 is allocated to three

§197 intangible assets: $153,000 to goodwill, $50,400 to a customer list with an expected life of 8 years,

and $50,400 to a 3 year non-compete agreement. On May 30th of the second year, the customer list is

sold for $10,000. Please round your amortization amounts to the nearest whole number. Round your

allocation percentage to the nearest whole percentage (e.g., .1234 as 12%)

1) What is Cannon's amortization expense for the second year?

2) What is the basis of the intangibles at the end of the second year?

99. Oksana started an LLC on November 2 of the current year. She incurred $30,000 of start-up costs. How

much of the start-up costs can be immediately expensed for the year? How much amortization may

Oksana deduct in the first year?

100.Putin Corporation began business on September 23rd of the current year. It incurred $40,000 of start-up

costs and $60,000 of organizational expenditures.

1) How much may be immediately expensed for the year?

2) How much amortization may be deducted in the first year, rounded to the nearest whole number?

101.Paulsen incurred $55,000 of research and experimental expenses and began amortizing them over 60

months during June of year 1. During May of year 3, Paulsen received a patent based upon the research

being amortized. $36,000 of legal expenses for the patent was incurred.

1) What is the basis of the patent, rounding amortization for each year to the nearest whole number?

2) What is the amortization expense with respect to the patent during the year it was issued, rounded to

the nearest whole number?

102.Sequoia purchased the rights to cut timber on several tracts of land over a fifteen year period. It paid

$500,000 for cutting rights. A timber engineer estimates that 500,000 board feet of timber will be cut.

During the current year, Sequoia cut 45,000 board feet of timber, which it sold for $900,000. What is

Sequoia's cost depletion expense for the current year?

103.PC Mine purchased a platinum deposit for $3,500,000. It estimated it would extract 17,000 ounces of

platinum from the deposit. PC mined the platinum and sold it reporting gross receipts of $500,000 and

$8 million for years 1 and 2, respectively. During years 1 and 2, PC reported net income (loss) from the

platinum deposit activity in the amount of ($100,000) and $3,800,000, respectively. In years 1 and 2, PC

actually extracted 2,000 and 8,000 ounces of platinum. What is PC's depletion expense for years 1 and 2

if the applicable percentage depletion for platinum is 22 percent, rounded to the nearest whole number?

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Preview: The xxxxxxxxxx convention xxxxxxx Section 197 xxxxxx have a xxxxxxxx period xx xxx months xxx amortization is xxxxxx = ($175,000/180) x 8) xx xxxxxx 2 xxx basis of xxx remaining assets xx as xxxxxxxxxx x Cannon's xxxxxxxxxxxx expense for xxx second year xx $16,500 xxxx xx calculated xx follows:99 $5,000 xx start-up expenses xxx be xxxxxxxxxxx xxxxxxxx and xxxx ($25,000/180) x x months) of xxxxxxxxxxxx may xx xxxxxxxx 2) xxxxxxxxxxxxx x 4 xxxxxx = $778 xx the xxxxxxxx xxxxx may xx amortized and xxxxxxxxxxxxx x 4 xxxxxx = xxxxxx xx the xxxxxxxxxxxxxxxxxxxxxxxxxx may be xxxxxxxxx 100 1) xxxxxx of xxxxxxxx xxxxxxxx can xx immediately expensed xxxxx may not xxxxxxxxxxx expense xxx xxxxxxxxxxxxxx costs xxxxxxx theimmediate expensing xx phased out xxxxxx for xxxxxx xxx organization xxxxxxxxxxxx exceeding $50,000 xx a result.....
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