Garick Ltd. has a December 31 year end. In February 2020, the Company acquires three photocopiers at a cost of $23,000 each. Because of their extremely heavy usage, they must be replaced in November, 2020. They are replaced with three new photocopiers at a cost of $21,500 each. The Company received a trade in allowance of $2,500 for each of the replaced machines. Indicate the amount(s)that would be deducted from 2020 business income if no election is made to put each photocopier in a separate class. Contrast this with the deduction(s)that would be available if the separate class election is used.

Question

Quizplus · Accepted Answer

The Answer of Garick Ltd. has a December 31 year end. In February 2020, the Company acquires three photocopiers at a cost of $23,000 each. Because of their extremely heavy usage, they must be replaced in November, 2020. They are replaced with three new photocopiers at a cost of $21,500 each. The Company received a trade in allowance of $2,500 for each of the replaced machines. Indicate the amount(s)that would be deducted from 2020 business income if no election is made to put each photocopier in a separate class. Contrast this with the deduction(s)that would be available if the separate class election is used.