Question

Asset	Selling Price	Date Sold	Date Acquired	Life	Cost	Acc. Depr.	Adj. Basis	Gain/ (Loss)
Warehouse	135,000	Oct. 6	04/12/1997	39	245,000
Land	130,000	Oct. 6	04/12/1997		100,000
Computer Equipment	2,500	Jan.1	04/16/2016	7	12,600
Office Equipment	6,700	March.9	11/08/2010	7	24,500
Manufacturing Equipment	36,200	July 25	5/22/2013	7	86,000

Murdoch Corporation sold the above assets in 2019. Murdoch had operating income of $500,000. The company also sold marketable securities for $31,000. They had been purchased five years earlier for $42,000.  The land is occupied by the warehouse. Complete the blank columns. "Life" means MACRS recovery period. In the past Murdoch has never used Sec. 179 or bonus depreciation. Attach a schedule showing your calculation of accumulated depreciation. b) Compute Murdoch's taxable income. Show the steps of your calculations.

Answer 1

Asset Selling Date Date Life Cost Acc. Adj. Gain/ Price Sold Acquired Depr. Basis (L055) Warehouse 135,000 | Oct. 6 04/12/1997 19 245,000 138,205 106,795 28,205 Land 130.000 Oct 6 04/12/1997 100,000 - 1,00.000 30.000 Computer 2,500 Jan 1 04/16/2016? 12,600 5.400 7,20014700) Equipment Office 16,700 March.9 | 11/08/2010 17 24,500 .500 o 6700 Equipment Manufacturing 36,200 July 25 5/22/2013 | | 86.000 73,71412,286 23914 Equipment

ASSET AccUMULATED DEPRECIATION nd BASIS loss Warehouse 138,205 1,06,795 28,205 20.000 LAND 90,000 5,400 7,200 (4700) 31,500 computer Не е manufacturing 6,700 12,286 73,714 23,914 | murdoch's tonable income:- $ 5,00,000 $ * operating Income * profits from Sale of Business Assets - * loss from sale of marketable securities 24,119 11.000) $ 573,119 to taxable income a