Question

Viking Corporation bought (and placed into service) several pieces of new 7-YR MACRS equipment for their new state-of-the-art practice facility during 2019. $300,000 for bench warmers in June, $400,000 for blocking sleds in January, and $500,000 for training carts in November. Calculate the total tax depreciation expense on these assets for Viking Corporation for 2019. Assume that Viking Corporation follows a calendar year. Please be sure to show your work to enable partial credit.

Answer 1

Calculation of Total tax depreciation expense for 2019:-

Cost of Bench Warmers placed in June 2019= $ 300,000

Depreciation will be allowed for 7 months of 2019:-

= Cost x ( no. month used in 2019 / life)

= 300,000 x 7 / (12 x 7)

= 300,000 x 7 / 84

Tax Depreciation expense = $ 25,000