Assume that Ernesto purchased a digital camera on July 10 of year 1 for $3,000. In year 1, 80 percent of his camera usage was for his business and 20 percent was for personal photography activities. This was the only asset he placed in service during year 1. Ignoring any potential §179 expense and bonus depreciation, answer the questions for each of the following alternative scenarios: (Use MACRS Table 1, Table 2.) (Leave no answer blank. Enter zero if applicable.) Problem 10-66 Part a (Static) a. What is Ernesto’s depreciation deduction for the camera in year 1?
Assume that Ernesto purchased a digital camera on July 10 of year 1 for $3,000. In year 1, 80 percent of his camera usage was for his business and 20 percent was for personal photography activities. This was the only asset he placed in service during year 1. Ignoring any potential §179 expense and bonus depreciation, answer the questions for each of the following alternative scenarios: (Use MACRS Table 1, Table 2.) (Leave no answer blank. Enter zero if applicable.) Problem 10-66 Part a (Static) a. What is Ernesto’s depreciation deduction for the camera in year 1?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
Assume that Ernesto purchased a digital camera on July 10 of year 1 for $3,000. In year 1, 80 percent of his camera usage was for his business and 20 percent was for personal photography activities. This was the only asset he placed in service during year 1. Ignoring any potential §179 expense and bonus
Problem 10-66 Part a (Static)
a. What is Ernesto’s depreciation deduction for the camera in year 1?
Transcribed Image Text:**Table 1: MACRS Half-Year Convention**
This table displays the depreciation rates according to the Modified Accelerated Cost Recovery System (MACRS) for various recovery periods. The rates are organized by year and recovery period length, detailing the percentage of an asset's cost that can be depreciated each year.
| Year | 3-Year | 5-Year | 7-Year | 10-Year | 15-Year | 20-Year |
|-------|--------|--------|--------|---------|---------|---------|
| Year 1 | 33.33% | 20.00% | 14.29% | 10.00% | 5.00% | 3.750% |
| Year 2 | 44.45 | 32.00 | 24.49 | 18.00 | 9.50 | 7.219 |
| Year 3 | 14.81 | 19.20 | 17.49 | 14.40 | 8.55 | 6.677 |
| Year 4 | 7.41 | 11.52 | 12.49 | 11.52 | 7.70 | 6.177 |
| Year 5 | | 11.52 | 8.93 | 9.22 | 6.93 | 5.713 |
| Year 6 | | 5.76 | 8.92 | 7.37 | 6.23 | 5.285 |
| Year 7 | | | 8.93 | 6.55 | 5.90 | 4.888 |
| Year 8 | | | 4.46 | 6.55 | 5.90 | 4.522 |
| Year 9 | | | | 6.56 | 5.91 | 4.462 |
| Year 10| | | | 6.55 | 5.90 | 4.461 |
| Year 11| | | | 3.28 | 5.91 | 4.462 |
|
Transcribed Image Text:### MACRS Mid-Quarter Convention Tables
These tables illustrate the Modified Accelerated Cost Recovery System (MACRS) depreciation rates under the Mid-Quarter Convention. This applies to property placed in service at different times of the year. The rates are divided based on 5-year and 7-year recovery periods.
---
**Table 2a: Property Placed in Service During the First Quarter**
| Year | 5-Year | 7-Year |
|------|--------|--------|
| 1 | 35.00% | 25.00% |
| 2 | 26.00% | 21.43% |
| 3 | 15.60% | 15.31% |
| 4 | 11.01% | 10.93% |
| 5 | 11.01% | 8.75% |
| 6 | 1.38% | 8.74% |
| 7 | | 8.75% |
| 8 | | 1.09% |
---
**Table 2b: Property Placed in Service During the Second Quarter**
| Year | 5-Year | 7-Year |
|------|--------|---------|
| 1 | 30.00% | 17.85% |
| 2 | 30.00% | 23.47% |
| 3 | 18.00% | 16.76% |
| 4 | 11.37% | 11.97% |
| 5 | 11.37% | 8.87% |
| 6 | 4.26% | 8.87% |
| 7 | | 8.87% |
| 8 | | 3.34% |
---
**Table 2c: Property Placed in Service During the Third Quarter**
| Year | 5-Year | 7-Year |
|------|---------|---------|
| 1 | 15.00% | 10.71% |
| 2 | 34.00% | 25.51% |
| 3 | 20.40% | 18.22% |
| 4
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 2 steps with 1 images
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Recommended textbooks for you
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education