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Table 1 https://ezto-cf-media.mheducation.com/Media/Connect_Production/bne/accou

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Question

Table 1
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Table 2

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Required information The Tollowing information applies to the questions displayed below.] Evergreen Corporation (calendar-year-end) acquired the following assets during the current year: (ignore 8179 expense and bonus depreciation for this problem): (Use MACRS Table 1 and Table 2.) Original Basis Date Placed in Service October 25 February 3 August 17 April 22 Asset $ 70,000 Machinery Computer equipment Used delivery truck* Furniture 10,000 23,000 150,000 "The delivery truck is not a luxury automobile b. What would be the allowable MACRS depreciation on Evergreen's property in the current year if Evergreen does not elect out of bonus depreciation? MACRS depreciation

Explanation / Answer

A. Asset Date placed in service Original basis Rate Depreciation Computer Equipment (5Year) Feb-03 10000 20% 2000 Furniture (7Year) Apr-22 150000 14.29% 21435 Used Delivery Truck (5YEar) Aug-17 23000 20% 4600 Machinery (7Year) Oct-25 70000 14.29% 10003 38038 Evergreen isn’t required to use the mid-quarter convention because only 27.67% of its tangible personal property was placed in service during the 4th quarter (70,000/253,000). Additionally, the delivery truck is not considered to be a luxury auto. B. Asset Date placed in service Original basis Bonus Remaining Basis Rate Depreciation Computer Equipment (5Year) Feb-03 10000 5000 5000 20% 1000 Furniture (7Year) Apr-22 150000 75000 75000 14.29% 10717.5 Used Delivery Truck (5YEar) Aug-17 23000 0 23000 20% 4600 Machinery (7Year) Oct-25 70000 35000 35000 14.29% 5001.5 115000 21319 Allowable MACRS Depreciation = 115000+21319 = 136319 Under Half Year Convention

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