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Levart [38]
3 years ago
6

Rex's Wrecks purchased $1,251,000 in new equipment during 2019. Rex wants to use Section 179 to expense the maximum amount of th

e purchase. If Rex is not using bonus depreciation, how much will Rex get to expense under Section 179 and what will be the adjusted basis of the assets for calculating MACRS depreciation expense?
Business
1 answer:
lana66690 [7]3 years ago
6 0

Answer:

Rex can expense up to $1 million under § 179, and the remaining $251,000 will be the adjusted basis subject to MARCS.

Explanation:

The Tax Cuts and Jobs Act (TCJA) of 2017 increased the maximum amount that could be deducted under § 179 from $500,000 to $1 million.

§ 179 allows businesses to deduct the cost of tangible personal property as an expense instead of applying depreciation methods. It is mostly used by small businesses especially when they purchase new machinery and equipment.

By using § 179 businesses save money since the value of money changes over time, and one dollar saved today is worth more than one dollar saved tomorrow.

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Dublin Corporation reported net sales of $250,000, cost of goods sold of $150,000, operating expenses of $50,000, net income of
tatuchka [14]

The profit margin rate is 13%. And the gross profit rate is 40%.

Net Profit Margin = Net Profit ⁄ Gross Revenue x 100

Net Profit is calculated by subtracting all company expenses from gross revenue. Profit margin calculation results are expressed as a percentage. For example, a 10% profit margin means that for every $1 in sales, the company earns $0.10 in net profit.

But in general, small businesses have healthy profit margins between 7% and 10%. However, be aware that certain companies may have lower profit margins. B. A retail or food company. This is because overhead costs tend to be high.

Learn more about  profit margin rate here: brainly.com/question/19865598

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5 0
1 year ago
Someone who wants the credentials of skilled training, but in less time than a four-year degree should consider
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Its B. Career or Technical Education. Hope it helps :)

6 0
3 years ago
Case A.
MA_775_DIABLO [31]

Answer:

Kapono Farms

Case A:

a. The loss that Kapono would recognize on the exchange is:

= $6,600.

The initial value of the new tractor is:

= $38,900.

b. The gain that Kapono would recognize on the exchange is:

= $6,500.

The initial value of the new tractor, if cash payment of $29,000 was made, would be:

= $52,000.

Case B:

c. The amount of gain that Kapono would recognize on the exchange is:

= $245,000.

The initial value of the new land is:

= $790,000.

d. The amount of the loss that Kapono would recognize on the exchange of land is:

= $109,000.

The initial value of the new land is $495,000, if payment of $59,000 is made.

e. If the exchange lacked commercial substance, there is no gain or loss.

The initial value of the new land would be the book value of the old farmland, which is:

= $545,000.

Explanation:

a) Data and Calculations:

Book value of old tractor = $16,500     $16,500

Fair value of old tractor =       9,900      23,000

Loss from the exchange =   $6,600       -6,500

Value of new tractor

Fair value of old tractor =     $9,900   $23,000

Cash payment to complete 29,000     29,000

Value of new tractor          $38,900   $52,000

Case B:

Book value of farmland = $545,000   $545,000

Fair value of farmland =      790,000     436,000

Gain from exchange =      $245,000   $109,000

Value of New Farmland:

Fair value of old farmland $790,000  $436,000

Cash payment to complete   59,000      59,000

Value of new farmland =   $849,000  $495,000

3 0
2 years ago
Trail Runner guarantees its snowmobiles for three years. Company experience indicates that warranty costs will be approximately
polet [3.4K]

Answer:

1. Record the​ sales, warranty ​expense, and warranty payments for the company. Ignore cost of goods sold.

To record sales during 2018:

Dr Cash 120,000

Dr Accounts receivable 480,000

    Cr Sales revenue 600,000

To record warranty liability:

Dr Warranty expense 30,000

    Cr Warranty payable 30,000

To record warranty related expenses:

Dr Warranty payable 10,000

    Cr Cash 10,000

Instead of cash it could have been wages payable, or repair parts inventory, but since we are not given any details, the safest thing is to assume cash payments.

2. Assume the Estimated Warranty Payable is​ $0 on January​ 1, 2018. Post the 2018 transactions to the Estimated Warranty Payable​ T-account. At the end of 2018 how much in Estimated Warranty Payable does the company​ owe?Use the​ T-account to determine the ending balance for the Estimated Warranty Payable account.

Ending balance of warranty payable account = $20,000

                                    Warranty Payable

                                   debit               credit

beg. bal.                         0                      0

warranty liability                                30,000

warranty costs            <u>10,000                         </u>

end. bal.                                             20,000

4 0
3 years ago
A monopolistically competitive firm is producing at an output level in the short run where average total cost is $4.75, price is
Scorpion4ik [409]

Answer: With a loss

Explanation:

The firm here has its Marginal cost higher than it's marginal revenue.

This means that for every additional unit sold, the company is incurring a loss of $0.50 which is the difference between the marginal cost and the marginal revenue.

The company is therefore operating at a loss because every additional unit is costing them instead of benefitting them. To counter this, they need to reduce production so that marginal cost will fall.

5 0
3 years ago
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