Joanne is in the 24% tax bracket and owns depreciable business equipment that she purchased several years ago for $135,000. She has taken $100,000 of depreciation on the equipment, and it is worth $55,000. Joanne's niece, Susan, is starting a new business and is short of cash. Susan has asked Joanne to gift the equipment to her so that Susan can use it in her business. Joanne no longer needs the equipment. a. Assume Joanne gives the equipment, worth $55,000, to her niece. Ignore any gift tax implications. If Joanne gives the equipment to Susan, in depreciation recapture potential carry over to Susan
b. Assume Joanne decides to sell the equipment to a third party for $55,000 and gives her niece cash instead of the equipment. If Joanne sells the equipment to someone else, she will have cash (after taxes) to give to Susan.

Flounder supply company, a newly formed corporation, incurred the following expenditures related to land, to buildings, and to machinery and equipment. abstract company’s fee for title search $1,066 architect’s fees 6,499 cash paid for land and dilapidated building thereon 178,350 removal of old building $41,000 less: salvage 11,275 29,725 interest on short-term loans during construction 15,170 excavation before construction for basement 38,950 machinery purchased (subject to 2% cash discount, which was not taken) 112,750 freight on machinery purchased 2,747 storage charges on machinery, necessitated by noncompletion of building when machinery was delivered 4,469 new building constructed (building construction took 6 months from date of purchase of land and old building) 994,250 assessment by city for drainage project 3,280 hauling charges for delivery of machinery from storage to new building 1,271 installation of machinery 4,100 trees, shrubs, and other landscaping after completion of building (permanent in nature) 11,070 instructions determine the amounts that should be debited to land, to buildings,and to machinery and equipment. assume the benefits of capitalizing interest during constructionexceed the cost of implementation. indicate how any costs notdebited to these accounts should be recorded.