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erwise) for the automobile in 202 ving alternative scenarios (assum

erwise) for the automobile in 202 ving alternative scenarios (assum

FINANCIAL ACCOUNTING
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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Lina purchased a new car for use in her business during 2021. The auto was the only business asset she purchased during the year, and her business was extremely profitable. Calculate her maximum depreciation deductions (including §179 expense unless stated otherwise) for the automobile in 2021 and 2022 (Lina doesn’t want to take bonus depreciation for 2021 or 2022) in the following alternative scenarios (assuming half-year convention for all): (Use MACRS Table 1, Table 2, and Exhibit 10-10.) e. The vehicle cost $92,000, and she used it 20 percent for business. | Year | Depreciation deduction | |------|-------------------------| | 2021 | | | 2022 | |
Transcribed Image Text:Lina purchased a new car for use in her business during 2021. The auto was the only business asset she purchased during the year, and her business was extremely profitable. Calculate her maximum depreciation deductions (including §179 expense unless stated otherwise) for the automobile in 2021 and 2022 (Lina doesn’t want to take bonus depreciation for 2021 or 2022) in the following alternative scenarios (assuming half-year convention for all): (Use MACRS Table 1, Table 2, and Exhibit 10-10.) e. The vehicle cost $92,000, and she used it 20 percent for business. | Year | Depreciation deduction | |------|-------------------------| | 2021 | | | 2022 | |
### Depreciation Rates Using MACRS Mid-Quarter Convention #### Table 2a: For Property Placed in Service During the First Quarter | Year | 5-Year | 7-Year | |------|--------|--------| | Year 1 | - | - | | Year 2 | - | - | | Year 3 | - | - | | Year 4 | - | - | | Year 5 | - | - | | Year 6 | - | - | | Year 7 | - | - | | Year 8 | - | - | (Note: This table is mentioned but not shown in the image.) #### Table 2b: For Property Placed in Service During the Second Quarter | Year | 5-Year | 7-Year | |--------|--------|--------| | Year 1 | 25.00% | 17.85% | | Year 2 | 30.00 | 23.47 | | Year 3 | 18.00 | 16.76 | | Year 4 | 11.37 | 11.97 | | Year 5 | 11.37 | 8.87 | | Year 6 | 4.26 | 8.87 | | Year 7 | - | 8.87 | | Year 8 | - | 3.34 | #### Table 2c: For Property Placed in Service During the Third Quarter | Year | 5-Year | 7-Year | |--------|--------|--------| | Year 1 | 15.00% | 10.71% | | Year 2 | 34.00 | 25.51 | | Year 3 | 20.40 | 18.22 | | Year 4 | 12.24 | 13.02 | | Year 5 | 11.30 | 9.30 | | Year 6 | 7.06 | 8.85 | | Year 7 | - | 8.86 | | Year 8 | - | 5.53 | #### Table 2d: For Property Placed in Service During the Fourth Quarter | Year | 5-Year | 7-Year | |--------|--------|--------
Transcribed Image Text:### Depreciation Rates Using MACRS Mid-Quarter Convention #### Table 2a: For Property Placed in Service During the First Quarter | Year | 5-Year | 7-Year | |------|--------|--------| | Year 1 | - | - | | Year 2 | - | - | | Year 3 | - | - | | Year 4 | - | - | | Year 5 | - | - | | Year 6 | - | - | | Year 7 | - | - | | Year 8 | - | - | (Note: This table is mentioned but not shown in the image.) #### Table 2b: For Property Placed in Service During the Second Quarter | Year | 5-Year | 7-Year | |--------|--------|--------| | Year 1 | 25.00% | 17.85% | | Year 2 | 30.00 | 23.47 | | Year 3 | 18.00 | 16.76 | | Year 4 | 11.37 | 11.97 | | Year 5 | 11.37 | 8.87 | | Year 6 | 4.26 | 8.87 | | Year 7 | - | 8.87 | | Year 8 | - | 3.34 | #### Table 2c: For Property Placed in Service During the Third Quarter | Year | 5-Year | 7-Year | |--------|--------|--------| | Year 1 | 15.00% | 10.71% | | Year 2 | 34.00 | 25.51 | | Year 3 | 20.40 | 18.22 | | Year 4 | 12.24 | 13.02 | | Year 5 | 11.30 | 9.30 | | Year 6 | 7.06 | 8.85 | | Year 7 | - | 8.86 | | Year 8 | - | 5.53 | #### Table 2d: For Property Placed in Service During the Fourth Quarter | Year | 5-Year | 7-Year | |--------|--------|--------
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