Required information The following information applies to the questions displaye

Question

Required information The following information applies to the questions displayed below.] Woolard Inc. has taxable income in 2017 of $150,000 before any depreciation deductions (5179, bonus, or MACRS) and acquired the following assets during the year: (Use MACRS Table 1, Table 2, Table 3, Table 4 and Table 5.) (Do not round intermediate calculations. Round your answers to the nearest whole dollar amount.) Placed In Asset ServiceBasis office furniture (used) March 20 600,000 c. Woolard is concerned about future limitations on its §179 expense. How much §179 expense should Woolard expense this year if it wants to maximize its depreciation this year and avoid any carryover to future years? Answer is complete but not entirely correct. $179 s 375,000

Explanation / Answer

Depreciation rate for Office Furniture , Under MACRS (7 years property Class) , for the 1 st year 14.29% MACRS Depreciation =Depreciation rate * Cost of the Asset =14.29% *$600,000 =$85,740 Equation for solving §179 expense = Taxable income Beofre Depreciation - Depreciation Expenses /(1- Derepciation rate) §179 expense = ($150,000 -$85,740 ) /(1- 0.1429) =$$64260 /0.8571 =$74973.75 =$74974 (Rounded off) §179 expense is $74974 this Year , if its wants to maximize its depreciation this year and avoid any carryover to Future years

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