Question

Required information Convers Corporation (calendar-year-end) acquired the following assets during the current tax year: (ignore $179 expense and bonus depreciation for this problem): (Use MACRS Table 1. Table 2 and Table 5.) Asset Machinery Computer equipment Used delivery truck Furniture Total Date Placed in Service October 25 February 3 March 17 April 22 Original Basis $ 72,000 $ 12,000 $ 25,000 $152,000 $ 261,000 *The delivery truck is not a luxury automobile. In addition to these assets, Convers installed new flooring (qualified improvement property) to its office building on May 12 at a cost of $320,000. a. What is the allowable MACRS depreciation on Convers's property in the current year assuming Convers does not elect 5179 expense and elects out of bonus depreciation? (Round your intermediate calculations to the nearest whole dollar amount.) MACRS depreciation

Answer 1

Please find below table useful to compute desired results: -

А D E 1 Assets Life in Years Date Placed in Service Original Basis Rate Depreciation 2 Machinery Oct. 25 72000 =14.29/100 =D2*E2 3 Computer Equipment 5 Feb. 3 12000 =20/100 =D3*E3 4 Used Delivery Truck 5 Mar. 17 25000 =20/100 =D4*E4 5 Furniture Apr. 22 152000 =14.29/100 =D5*E5 6 Qualified Improvement 39 May. 12 320000 =1.605/100 =D6*E6 7 Total =SUMD2:D6) =SUM(F2:F6) 8 9 Assets Life in Years Date Placed in Service Original Basis Rate Depreciation 10 Machinery Oct. 25 72000 =100/100 =D10*E10 11 Computer Equipment Feb. 3 12000 =100/100 =D11*E11 12 Used Delivery Truck Mar. 17 25000 =100/100 =D12*E12 13 Furniture Apr. 22 152000 1=100/100 =D13*E13 14 Qualified Improvement 39 May. 12 320000 =1.605/100 =D14*E14 15 Total =SUMD10-D14) =SUM(F10:F14) 5

End results would be as follows: -

A DE 1 Assets Life in Years Date Placed in Service Original Basis Rate Depreciation 2 Machinery 7 Oct. 25 72.000 14.290% 10.289 3 Computer Equipment 5 Feb. 3 12.000 20.000% 2.400 4 Used Delivery Truck 5 Mar. 17 25.000 20.000% 5,000 5 Furniture 7 Apr. 22 152.000 14.290% 21,721 6 Qualified Improvement 39 May. 12 320.000 1.605% 5,136 7 Total 581,000 44,546 8 9 Assets Life in Years Date Placed in Service Original Basis Rate Depreciation 10 Machinery 7 Oct. 25 72.000 100.000% 72,000 11 Computer Equipment 5 Feb. 3 12.000 100.000%| 12,000 12 Used Delivery Truck 5 Mar. 17 25.000 100.000% 25,000 13 Furniture 7 Apr. 22 152.000 100.000% 152,000 14 Qualified Improvement 39 May. 12 320,000 1.605% 5,136 15 Total 581.000 266,136