Marlena acquired the following new assets during 2017: Marlena does not elect im
ID: 2522489 • Letter: M
Question
Marlena acquired the following new assets during 2017:
Marlena does not elect immediate expensing under § 179 or any additional first-year depreciation for 2017.
If required, round your answers to the nearest dollar. Click here to access the depreciation table to use to complete this problem.
a. What MACRS convention applies to the assets?
Half-year
Mid-quarter
Mid-month
Half-year
b. What class of property is each asset for MACRS?
Office furniture, seven-year; automobile, five-year; computers, five-year
Office furniture, five-year; automobile, five-year; computers, five-year
Office furniture, five-year; automobile, three-year; computers, three-year
Office furniture, seven-year; automobile, five-year; computers, five-year
Office furniture, seven-year; automobile, three-year; computers, five-year
c. The cost recovery for the current year is:
Date Asset Cost April 30 Computers $22,000 August 1 Automobile (GVW rating of over 6,000 pounds) 38,000 December 30 Office furniture 100,000Explanation / Answer
a. What MACRS convention applies to the assets?
Ans. Half-year
b. What class of property is each asset for MACRS?
Ans. Office furniture, five-year; automobile, five-year; computers, five-year
c. The cost recovery for the current year is:
Appendix A:
Depreciation for 2017 using Table A:
Computer : $ 22,000 * 20% = $ 4400
Automobile : $ 38,000 * 20% = $ 7600
Office Furniture : $ 1,00,000 * 20% = $ 20,000
Computers $ 4400 Automobiles $ 7600 Office Furniture $ 20,000