Question

At the beginning of the year, Poplock began a calendar-year dog boarding business called Griff's Palace. Poplock bought and placed in service the following assets during the year:

	Date	Cost
Asset	Acquired	Basis
Computer equipment	3/23	$	9,400
Dog-grooming furniture	5/12		11,400
Pickup truck	9/17		10,000
Commercial building	10/11		314,000
Land (one acre)	10/11		124,000

Assuming Poplock does not elect §179 expensing and elects not to use bonus depreciation, answer the following questions: (Use MACRS Table 1, Table 2, Table 3, Table 4 and Table 5.) (Do not round intermediate calculations. Round your final answers to the nearest whole dollar amount. Leave no answer blank. Enter zero if applicable.)

A. What is Poplock’s year 1 depreciation deduction for each asset?

Computer equiptment

Dog grooming furniture

Pickup truck

Commercial building

Land

Total

B. What is Poplock’s year 2 depreciation deduction for each asset?

Computer equiptment

Dog grooming furniture

Pickup truck

Commercial building

Land

Total

   

Answer 1

Poplock Year 1 and Year 2 Depreciation
					Depreciation rate		Depreciation ($)
Asset	Date required	Cost Basis ($)	Life of asset as per GDS (in yrs)	Method	Year 1	Year 2	Year 1	Year 2
Computer equipment	Mar-23	9,400	5	Mid-Quarter Convention - First Quarter (Table 2)	35%	26%	3,290	2,444
Dog-grooming furniture	05-Dec	11,400	7	Mid-Quarter Convention - Fourth Quarter (Table 5)	3.57%	27.55%	407	3,141
Pickup truck	Sep-17	10,000	5	Mid-Quarter Convention - Third Quarter (Table 4)	15%	34%	1,500	3,400
Commercial building	10-Nov	314,000	39	straight-line depreciationby dividing 1 by 39 years	0.02564	0.02564	8,051	8,051
Land (one acre)	10-Nov	124,000	-	No depreciation of Land	-	-	-	-
Total							13,248	17,036