Flax LLC Purchased Only One Asset This Year

question 79

Essay

Flax LLC purchased only one asset this year.On January 16 Flax placed in service a computer (five-year property)with a basis of $14,000. Calculate the maximum depreciation deduction (ignoring §179 and bonus depreciation). (Use MACRS Table 1.)

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Definitions:

Direct Labor-Hours

The number of labor hours spent by employees directly working on the production of goods or services.

Casting

A manufacturing process where a liquid material is poured into a mold, which contains a hollow cavity of the desired shape, and then allowed to solidify.

Assembly

The phase in manufacturing where components are put together to form a final product.

Predetermined Overhead Rates

Rates used to allocate manufacturing overhead costs to products or job orders, calculated based on estimated costs and activity levels.