Way Corporation disposed of the following tangible personal property assets in t
ID: 2604081 • Letter: W
Question
Way Corporation disposed of the following tangible personal property assets in the current year. Date Date Original Asset Acquired Sold Convention Basis Furniture (7-year) 5/12/13 7/15/17 HY $ 55,000 Machinery (7-year) 3/23/14 3/15/17 MQ 72,000 Delivery truck* (5-year) 9/17/15 3/13/17 HY 20,000 Machinery (7-year) 10/11/16 8/11/17 MQ 270,000 Computer (5-year) 10/11/17 12/15/17 HY 80,000 *Used 100 percent for business.
Assume that the delivery truck is not a luxury auto. Calculate Way Corporation’s 2017 depreciation expense
(ignore §179 expense and bonus depreciation). Exhibit 10-6 (Use MACRS Table 1 and Table 2.) (Round your intermediate dollar calculations and final answer to the nearest whole dollar amount.)
TABLE 1 MACRS Half-Year Convention Depreciation Rate for Recovery Period ear | 3-year | 5-year | 7-year | 10-year | 15-year | 20-year 33.33 4.45 14.81 7.41 20.00 32.00 19.20 11.52 11.52 5.6 123456789ong 14.29 24.49 17.49 12.49 8.93 8.92 8.93 4.46 |10.00 18.00 14.40 11.52 9.22 7.37 6.55 6.55 6.8 6.55 3.28 W 5.00 9.50 8.55 7.70 6.93 6.23 5.90 5.90 5.91 5.90 5.91 5.90 5.91 5.90 5.91 2.95 3.750 7.219 6.677 6.177 5.713 5.285 4.888 4.522 4.462 4.461 4.462 4.461 4.462 4.461 4.462 4.461 4.462 4.461 4.462 4.461 2.231 14 15 BaExplanation / Answer
Asset Basis Convention MACRS % Portion of full year depreciation allowed in case of disposal of asset Depreciation 1 2 3 4 1*3*4 Furniture 55000 HY 8.93% 50% 2456 Machinery 72000 MQ 10.93% 12.50% 984 Disposed in 1st quarter Delivery truck 20000 HY 19.20% 50% 1920 Machinery 270000 MQ 27.55% 62.50% 46491 Disposed in 3rd quarter Computer 80000 HY 0%* 50% 0 Total 51850 * No depreciation for asset acquired and sold in the same year
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