Exercise 8-19 (LO. 2)Euclid acquires a 7-year class asset on May 9, 2020, for $80,000 (the only asset acquired during the year). Euclid does not elect immediate expensing under § 179. He does not claim any available additional first-year depreciation.Click here to access the depreciation table to use for this problem.If required, round your answers to the nearest dollar.Calculate Euclid's cost recovery deduction for 2020 and 2021.2020: $2021: $ 8-7cCost Recovery TablesSummary of TablesExhibit 8.3Regular MACRS table for personalty.Depreciation methods: 200 or 150 percent declining-balance switching to straight-line.Recovery periods: 3, 5, 7, 10, 15, 20 years.Convention: half-year.Exhibit 8.4Regular MACRS table for personalty.Depreciation method: 200 percent declining-balance switching to straight-line.Recovery periods: 3, 5, 7 years.Convention: mid-quarter.Exhibit 8.5MACRS optional straight-line table for personalty.Depreciation method: straight-line.Recovery periods: 3, 5, 7, 10, 15, 20 years.Convention: half-year.Exhibit 8.6Alternative minimum tax declining-balance table for personalty.Depreciation method: 150 percent declining-balance switching to straight-line.Recovery periods: 3, 5, 7, 9.5, 10, 12 years.Convention: half-year.Exhibit 8.7Alternative depreciation system straight-line table for personalty.Depreciation method: straight-line.Recovery periods: 5, 10, 12 years.Convention: half-year.Exhibit 8.8Regular MACRS straight-line table for realty.Depreciation method: straight-line.Recovery periods: 27.5, 31.5, 39 years.Convention: mid-month.Exhibit 8.9Alternative depreciation system straight-line table for realty.Depreciation method: straight-line.Recovery period: 30, 40 years.Convention: mid-month. Exhibit 8.3MACRS Accelerated Depreciation for Personal Property Assuming Half-Year Convention (Percentage Rates) *Switchover to straight-line depreciation.Exhibit 8.4MACRS Accelerated Depreciation for Personal Property Assuming Mid-Quarter Convention (Percentage Rates)For Property Placed in Service after December 31, 1986 (Partial Table)3-YearRecovery YearFirst QuarterSecond QuarterThird QuarterFourth Quarter158.3341.6725.008.33227.7838.8950.0061.115-YearRecovery YearFirst QuarterSecond QuarterThird QuarterFourth Quarter135.0025.0015.005.00226.0030.0034.0038.007-YearRecovery YearFirst QuarterSecond QuarterThird QuarterFourth Quarter125.0017.8510.713.57221.4323.4725.5127.55Exhibit 8.5MACRS Straight-Line Depreciation for Personal Property Assuming Half-Year ConventionFor Property Placed in Service after December 31, 1986 Other Recovery YearsLast Recovery YearMACRS Class% First Recovery YearYears%Year%3-year16.67 2–3 33.33 4 16.67 5-year10.00 2–5 20.00 6 10.00 7-year7.14 2–7 14.29 8 7.14 10-year5.00 2–10 10.00 11 5.00 15-year3.33 2–15 6.67 16 3.33 20-year2.50 2–20 5.00 21 2.50 Note: The last two rows of this table are used for qualified improvement property (15-year normal MACRS; 20-year ADS). Exhibit 8.6Alternative Minimum Tax: 150% Declining-Balance Assuming Half-Year Convention (Percentage Rates) * The figures in this table are taken from the official table that appears in Rev.Proc. 87–57, 1987–2 C.B. 687. Because of its length, the complete table is not presented.**Switchover to straight-line depreciation.Exhibit 8.7ADS Straight-Line for Personal Property Assuming Half-Year Convention (Percentage Rates)For Property Placed in Service after December 31, 1986 (Partial Table)Recovery Year5-Year Class10-Year Class12-Year Class110.005.00 4.17220.0010.00 8.33320.0010.00 8.33420.0010.00 8.33520.0010.00 8.33610.0010.00 8.337 10.00 8.348 10.00 8.339 10.00 8.3410 10.00 8.3311 5.00 8.3412 8.3313 4.17 Exhibit 8.8MACRS Straight-Line Depreciation for Real Property Assuming Mid-Month Convention* (Percentage Rates) *The official tables contain a separate row for each year. For ease of presentation, certain years are grouped in these tables. In some instances, this will produce a difference of .001 for the last digit when compared with the official tables. Exhibit 8.9ADS Straight-Line for Real Property Assuming Mid-Month Convention (Percentage Rates) *Also used for residential rental property placed in service before 2018.

Depreciation is the amortization of company's assets over its useful life which shows under the…

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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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8-7cCost Recovery Tables

Summary of Tables
Exhibit 8.3	Regular MACRS table for personalty. Depreciation methods: 200 or 150 percent declining-balance switching to straight-line. Recovery periods: 3, 5, 7, 10, 15, 20 years. Convention: half-year.
Exhibit 8.4	Regular MACRS table for personalty. Depreciation method: 200 percent declining-balance switching to straight-line. Recovery periods: 3, 5, 7 years. Convention: mid-quarter.
Exhibit 8.5	MACRS optional straight-line table for personalty. Depreciation method: straight-line. Recovery periods: 3, 5, 7, 10, 15, 20 years. Convention: half-year.
Exhibit 8.6	Alternative minimum tax declining-balance table for personalty. Depreciation method: 150 percent declining-balance switching to straight-line. Recovery periods: 3, 5, 7, 9.5, 10, 12 years. Convention: half-year.
Exhibit 8.7	Alternative depreciation system straight-line table for personalty. Depreciation method: straight-line. Recovery periods: 5, 10, 12 years. Convention: half-year.
Exhibit 8.8	Regular MACRS straight-line table for realty. Depreciation method: straight-line. Recovery periods: 27.5, 31.5, 39 years. Convention: mid-month.
Exhibit 8.9	Alternative depreciation system straight-line table for realty. Depreciation method: straight-line. Recovery period: 30, 40 years. Convention: mid-month.

Exhibit 8.3MACRS Accelerated Depreciation for Personal Property Assuming Half-Year Convention (Percentage Rates)

*Switchover to straight-line depreciation.

Exhibit 8.4

MACRS Accelerated Depreciation for Personal Property Assuming Mid-Quarter Convention (Percentage Rates)

For Property Placed in Service after December 31, 1986 (Partial Table)
3-Year
Recovery Year	First Quarter	Second Quarter	Third Quarter	Fourth Quarter
1	58.33	41.67	25.00	8.33
2	27.78	38.89	50.00	61.11
5-Year
Recovery Year	First Quarter	Second Quarter	Third Quarter	Fourth Quarter
1	35.00	25.00	15.00	5.00
2	26.00	30.00	34.00	38.00
7-Year
Recovery Year	First Quarter	Second Quarter	Third Quarter	Fourth Quarter
1	25.00	17.85	10.71	3.57
2	21.43	23.47	25.51	27.55

Exhibit 8.5

MACRS Straight-Line Depreciation for Personal Property Assuming Half-Year Convention

For Property Placed in Service after December 31, 1986
		Other Recovery Years	Last Recovery Year
MACRS Class	% First Recovery Year	Years	%	Year	%
3-year	16.67		2–3		33.33	4	16.67
5-year	10.00		2–5		20.00	6	10.00
7-year	7.14		2–7		14.29	8	7.14
10-year	5.00		2–10		10.00	11	5.00
15-year	3.33		2–15		6.67	16	3.33
20-year	2.50		2–20		5.00	21	2.50

Note: The last two rows of this table are used for qualified improvement property (15-year normal MACRS; 20-year ADS).

Exhibit 8.6Alternative Minimum Tax: 150% Declining-Balance Assuming Half-Year Convention (Percentage Rates)

* The figures in this table are taken from the official table that appears in Rev.Proc. 87–57, 1987–2 C.B. 687. Because of its length, the complete table is not presented.

**Switchover to straight-line depreciation.

Exhibit 8.7

ADS Straight-Line for Personal Property Assuming Half-Year Convention (Percentage Rates)

For Property Placed in Service after December 31, 1986 (Partial Table)
Recovery Year	5-Year Class	10-Year Class	12-Year Class
1	10.00	5.00		4.17
2	20.00	10.00		8.33
3	20.00	10.00		8.33
4	20.00	10.00		8.33
5	20.00	10.00		8.33
6	10.00	10.00		8.33
7		10.00		8.34
8		10.00		8.33
9		10.00		8.34
10		10.00		8.33
11		5.00		8.34
12				8.33
13				4.17

Exhibit 8.8MACRS Straight-Line Depreciation for Real Property Assuming Mid-Month Convention* (Percentage Rates)

*The official tables contain a separate row for each year. For ease of presentation, certain years are grouped in these tables. In some instances, this will produce a difference of .001 for the last digit when compared with the official tables.

Exhibit 8.9ADS Straight-Line for Real Property Assuming Mid-Month Convention (Percentage Rates)

*Also used for residential rental property placed in service before 2018.

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