Consider the Following: A. Regent Corp. Bought a Machine Costing $22,400 on January

question 15

Essay

Consider the following:
a. Regent Corp. bought a machine costing $22,400 on January 1, 2016. A six-year life was estimated, and a $1,400 residual value was expected. The sum-of-the-years'-digits depreciation method was used.
Compute depreciation expense for 2020.
b. The company bought a machine costing $50,000 on January 1, 2016 A six-year life was expected, and residual value was estimated to be $8,000. The 150%-declining-balance depreciation method was used.
Compute depreciation expense for 2017.

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Definitions:

Subchapter S Election

A tax election made by small businesses to be taxed as a pass-through entity, avoiding double taxation.

Current Year

The present calendar or fiscal year in which business operations, transactions, or tax considerations are being referenced or conducted.

Form 2553

A tax form used by small businesses to elect to be treated as an S corporation for the purposes of federal taxation.

Taxable Income

The portion of income that is subject to taxation after all allowances, deductions, and exemptions are considered.