On January 2,2017,Orange Corporation Purchased Equipment for $300,000 with an ADS

question 6

Multiple Choice

On January 2,2017,Orange Corporation purchased equipment for $300,000 with an ADS recovery period of 10 years and a MACRS useful life of 7 years.Section 179 was not elected.MACRS depreciation properly claimed on the asset,including depreciation in the year of sale,totaled $79,605.The equipment was sold on July 1,2018,for $290,000.As a result of the sale,the adjustment to taxable income needed to arrive at current E & P is:

• A)No adjustment is required.
• B)Decrease $49,605.
• C)Increase $49,605.
• D)Decrease $79,605.
• E)None of the above.

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Definitions:

Cotyledons

Embryonic leaves in seed-bearing plants, which are the first to appear from a germinating seed and play a key role in photosynthesis and nutrient storage.

Vascular Bundles

Structures in plants that contain xylem and phloem tissues, responsible for transporting water, nutrients, and sugars.

Flesh

The soft tissue of the body, especially muscle and fat, that covers the bones and is beneath the skin.

Apple

A fruit produced by the apple tree, known scientifically as Malus domestica, widely cultivated for its sweet taste and nutritional benefits.