Dog Co. acquired and placed in service the following assets during the year: Date Cost Asset Placed in Service Basis Computer equipment 3/9 $ 15,800 Furniture 5/23 23,200 Commercial building 10/19 347,000 Assuming Dog Co. 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.) b. What is Dog Co.'s year 3 cost recovery for each asset if Dog Co. sells all of these assets on 4/16 of year 3?
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.
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Dog Co. acquired and placed in service the following assets during the year:
| Date | Cost | ||
| Asset | Placed in Service | Basis | |
| Computer equipment | 3/9 | $ | 15,800 |
| Furniture | 5/23 | 23,200 | |
| Commercial building | 10/19 | 347,000 | |
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Assuming Dog Co. does not elect §179 expensing and elects not to use bonus
b. What is Dog Co.'s year 3 cost recovery for each asset if Dog Co. sells all of these assets on 4/16 of year 3?
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