Question

Required information [The following information applies to the questions displayed below.] Evergreen Corporation (calendar-year-end) acquired the following assets during the current year: (ignore $179 expense and bonus depreciation for this problem): (Use MACRS Table 1 and Table 2.) Asset Machinery Computer equipment Used delivery truck* Furniture Date Placed in Service October 25 February 3 August 17 April 22 Original Basis $ 88,000 23,500 36,500 172,500 *The delivery truck is not a luxury automobile. b. What is the allowable MACRS depreciation on Evergreen's property in the current year if Evergreen does not elect out of bonus depreciation?

Answer 1

Solution: MACRS Depreciation = $ 49,225

Assets	Place in service	Recovery Period	Original Basis (a)	Macrs Rate (b)	Depreciation Expense (a*b)
Computer Equipment	Feb. 3	5 Years	$    23,500	20.00%	$                4,700
Furniture	Apr. 22	7 Years	$ 172,500	14.29%	$              24,650
Used delivery truck	Aug. 17	5 Years	$    36,500	20.00%	$                7,300
Machinery	Oct. 25	7 Years	$    88,000	14.29%	$              12,575
Total			$ 320,500		$              49,225

Notes:

1) We used Macrs Half Year Convention.

2) Mid Quarter does not applies for the question because asset purchased in last quarter is less than 40% of total assets purchased during the year.