Lax LLC purchased only one asset during the current year (a full 12-month tax year). On August 26 Lax placed in service computer equipment (five-yearproperty) with a basis of $34,000. Calculate the maximum depreciation expense for the current year (ignoring §179 and bonus depreciation). (UseMACRS Table 1.)Multiple Choice$4,800O $5,658$5,800O $6,800None of the choices are correct. Table 1 MACRS Half-Year ConventionDepreciation Rate for Recovery Period3-Year5-Year7-Year10-Year15-Year20-YearYear 1Year 2Year 3Year 433.33%20.00%14.29%10.00%5.00%3.750%44.4532.0024.4918.009.507.21914.8119.2017.4914.408.556.6777.4111.5212.4911.527.706.177Year 511.528.939.226.935.713Year 65.768.927.376.235.285Year 78.936.555.904.888Year 84.466.555.904.522Year 96.565.914.462Year 106.555.904.461Year 113.285.914.462Year 125.904.461Year 135.914.462Year 145.904,461Year 155.914.462Year 162.954.461Year 174.462Year 184,461Year 194.462Year 204,461Year 212.231

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Description: Lax LLC purchased only one asset during the current year (a full 12-month tax year). On August 26 Lax placed in service computer equipment (five-yearproperty) with a basis of $34,000. Calculate the maximum depreciation expense for the current year (

Depreciation is writing down the value of asset as it is used in the business operation. The…

Answered: Calculate the maximum depreciation…

Business

Accounting

Calculate the maximum depreciation expense for the current year (ignoring 3179 and bonus depreciation). (Use

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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Concept explainers

Depreciation Methods

The word "depreciation" is defined as an accounting method wherein the cost of tangible assets is spread over its useful life and it usually denotes how much of the assets value has been used up. The depreciation is usually considered as an operating expense. The main reason behind depreciation includes wear and tear of the assets, obsolescence etc.

Depreciation Accounting

In terms of accounting, with the passage of time the value of a fixed asset (like machinery, plants, furniture etc.) goes down over a specific period of time is known as depreciation. Now, the question comes in your mind, why the value of the fixed asset reduces over time.

Topic Video

Question

Lax LLC purchased only one asset during the current year (a full 12-month tax year). On August 26 Lax placed in service computer equipment (five-year
property) with a basis of $34,000. Calculate the maximum depreciation expense for the current year (ignoring §179 and bonus depreciation). (Use
MACRS Table 1.)
Multiple Choice
$4,800
O $5,658
$5,800
O $6,800
None of the choices are correct.

Table 1 MACRS Half-Year Convention
Depreciation Rate for Recovery Period
3-Year
5-Year
7-Year
10-Year
15-Year
20-Year
Year 1
Year 2
Year 3
Year 4
33.33%
20.00%
14.29%
10.00%
5.00%
3.750%
44.45
32.00
24.49
18.00
9.50
7.219
14.81
19.20
17.49
14.40
8.55
6.677
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
Year 12
5.90
4.461
Year 13
5.91
4.462
Year 14
5.90
4,461
Year 15
5.91
4.462
Year 16
2.95
4.461
Year 17
4.462
Year 18
4,461
Year 19
4.462
Year 20
4,461
Year 21
2.231

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