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Ironrock is a newly formed chocolate manufacturing company in Nevada. During the current year, the company acquired and placed several assets in service. All assets were acquired and placed in service on the first day of the year. The new facility design includes areas for candy making classes. The costs for the year are outlined below.
The company has taxable income for the year of $250,000.
|
Annual Cost |
Amount |
|
Building (building $950k; land $2500k) |
$1,200,000 |
|
Manufacturing equipment for melting, mixing, and tempering chocolate |
900,000 |
|
Routine maintenance of equipment during the year |
50,000 |
|
Displays, molds, and fixtures for candy-making lessons |
455,000 |
|
Office furniture |
60,000 |
|
Delivery van |
45,000 |
|
Total Cost |
2,710,000 |
Create a table in the analysis section that outlines each acquisition cost and provide the following information for each. The table should include each asset’s description, depreciation amount, asset class (Refer to Revenue Procedure 87-56), cost recovery period, and depreciation convention. Explain.
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