Introduction
Gross Income
Above the Line Deductions
Itemize Deductions
Personal Exemptions
Taxable Income
Tax Credits
Conclusion
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ACC 547 Week 3 Comprehensive Problem Machines Inc
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Comprehensive Problem for Chapters 7 and 8. Sam Johnson started a
small machine shop, Machines, Inc., in his garage and incorporated it
in March of 2013 as a calendar-year corporation. At that time, he
began using his personal computer and tools solely for the business as
part of his contribution to the corporation. The computer cost $2,700
but had a fair market value of only $900 at conversion and the tools,
which had cost $1,500, were valued at $1,100. During 2013, Machines,
Inc. purchased two machines: Machine A, purchased on May 2, cost
$24,000; Machine B, purchased on June 5, cost $40,000.
The corporation expensed Machine A under Section 179. The
computer, tools, and Machine B were depreciated using accelerated
MACRS only. The corporation did not take any depreciation on the
garage nor did Sam charge the business rent because the business
moved to a building the business purchased for $125,000 on January
5, 2014. On January 20, 2014, Machines purchased $4,000 of office
furniture and on July 7, it purchased Machine C for $48,000. It