In March 2020, Jones Company purchased a Mercedes for use in its business at a cost of $73,000. Required: Assuming no bonus depreciation or Section 179 deduction, calculate the allowable tax depreciation on this asset for 2020, 2021, and 2022. Use Table 7-1 and Table 7-2. Use the below table for annual depreciation deduction for year 2020 to 2022:2020...$ 10,1002021... 16,1002022... 9,7002023 and subsequent years... 5,760* Refer to attached images for Table 7-1 and Table 7-2 In March 2020, Jones Company purchased a Mercedes for use in its business at a cost of $73,000.Required:Assuming no bonus depreciation or Section 179 deduction, calculate the allowable tax depreciation on this asset for 2020, 2021, and2022. Use Table 7-1 and Table 7-2. Use the below table for annual depreciation deduction for year 2020 to 2022:2020$ 10,100202116,10020229,7002023 and subsequent years5,760Amount2020 depreciation2021 depreciation2022 depreciation TABLE 7.1 Recovery Periods for Tangible Business AssetsMACRS RecoveryPeriod3 years5 years7 years10 years15 years20 years25 years27.5 years39 years50 yearsTABLE 7.2 MACRS for Business Personalty (Half-Year Convention)Recovery PeriodYear3-Year5-Year7-Year123456789101112131415161718192021Assets IncludedSmall manufacturing tools, racehorses and breeding hogs, special handling devices used in foodmanufacturing.Cars, trucks, buses, helicopters, computers, typewriters, duplicating equipment, breeding anddairy cattle, cargo containers, new farming machinery and equipment.Office furniture and fixtures, railroad cars and locomotives, most machinery and equipment.Single-purpose agricultural and horticultural structures; assets used in petroleum refining, vessels,barges, and other water transportation equipment; fruit- or nut-bearing trees and vines.Certain building improvements; land improvements such as fencing, roads, sidewalks, bridges,irrigation systems, and landscaping; telephone distribution plants; pipelines; billboards; andservice station buildings.Certain farm buildings, municipal sewers.Commercial water utility property.Residential rental real property (duplexes and apartments).Nonresidential real property (office buildings, factories, and warehouses).Railroad grading or tunnel bore.10-Year15-Year10.00%5.00%18.009.5014.408.5511.527.709.226.937.376.236.555.906.555.906.565.916.555.903.285.915.905.915.905.912.9533.33%44.4514.817.4120.00%32.0019.2011.5211.525.76Depreciation Rate14.29%24.4917.4912.498.938.928.934.4620-Year3.750%7.2196.6776.1775.7135.2854.8884.5224.4624.4614.4624.4614.4624.4614.4624.4614.4624.4614.4624.4612.231

Depreciation refers to the cost or basic value of the fixed asset which is estimated over useful…

Answered: 16,100 2022... 9,700

Business

Accounting

16,100 2022... 9,700

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Question

100%

In March 2020, Jones Company purchased a Mercedes for use in its business at a cost of $73,000. Required: Assuming no bonus depreciation or Section 179 deduction, calculate the allowable tax depreciation on this asset for 2020, 2021, and 2022. Use Table 7-1 and Table 7-2. Use the below table for annual depreciation deduction for year 2020 to 2022:

2020...$ 10,100

2021... 16,100

2022... 9,700

2023 and subsequent years... 5,760

* Refer to attached images for Table 7-1 and Table 7-2

In March 2020, Jones Company purchased a Mercedes for use in its business at a cost of $73,000.
Required:
Assuming no bonus depreciation or Section 179 deduction, calculate the allowable tax depreciation on this asset for 2020, 2021, and
2022. Use Table 7-1 and Table 7-2. Use the below table for annual depreciation deduction for year 2020 to 2022:
2020
$ 10,100
2021
16,100
2022
9,700
2023 and subsequent years
5,760
Amount
2020 depreciation
2021 depreciation
2022 depreciation

TABLE 7.1 Recovery Periods for Tangible Business Assets
MACRS Recovery
Period
3 years
5 years
7 years
10 years
15 years
20 years
25 years
27.5 years
39 years
50 years
TABLE 7.2 MACRS for Business Personalty (Half-Year Convention)
Recovery Period
Year
3-Year
5-Year
7-Year
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
Assets Included
Small manufacturing tools, racehorses and breeding hogs, special handling devices used in food
manufacturing.
Cars, trucks, buses, helicopters, computers, typewriters, duplicating equipment, breeding and
dairy cattle, cargo containers, new farming machinery and equipment.
Office furniture and fixtures, railroad cars and locomotives, most machinery and equipment.
Single-purpose agricultural and horticultural structures; assets used in petroleum refining, vessels,
barges, and other water transportation equipment; fruit- or nut-bearing trees and vines.
Certain building improvements; land improvements such as fencing, roads, sidewalks, bridges,
irrigation systems, and landscaping; telephone distribution plants; pipelines; billboards; and
service station buildings.
Certain farm buildings, municipal sewers.
Commercial water utility property.
Residential rental real property (duplexes and apartments).
Nonresidential real property (office buildings, factories, and warehouses).
Railroad grading or tunnel bore.
10-Year
15-Year
10.00%
5.00%
18.00
9.50
14.40
8.55
11.52
7.70
9.22
6.93
7.37
6.23
6.55
5.90
6.55
5.90
6.56
5.91
6.55
5.90
3.28
5.91
5.90
5.91
5.90
5.91
2.95
33.33%
44.45
14.81
7.41
20.00%
32.00
19.20
11.52
11.52
5.76
Depreciation Rate
14.29%
24.49
17.49
12.49
8.93
8.92
8.93
4.46
20-Year
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

Definition Video Definition Accounting method wherein the cost of a tangible asset is spread over the asset's useful life. Depreciation usually denotes how much of the asset's value has been used up and is usually considered an operating expense. Depreciation occurs through normal wear and tear, obsolescence, accidents, etc. Video

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