In 2020, LRRR Corp., a calendar year corporation, acquired and placed in service the assets listed below. Asset Placed in Service Cost Recovery Period Computer 8/21/2020 1,050,000     5 years Machine 10/12/2020 1,000,000     7 years Warehouse 12/2/2020 2,000,000    39 years Assume (1) no bonus depreciation, (2) no Section 179 expense for question.  1. Assume LRRR Corp sold all assets on May 23, 2022. What is LRRR Corps's depreciation expense in 2022? 2. Explain what would be different is the Machine was placed in service on April 12, 2020.  3. If bonus depreciation is taken on all eligible assets, what is the total depreciation for 2020?

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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In 2020, LRRR Corp., a calendar year corporation, acquired and placed in service the assets listed below.

Asset

Placed in Service

Cost

Recovery Period

Computer

8/21/2020

1,050,000

    5 years

Machine

10/12/2020

1,000,000

    7 years

Warehouse

12/2/2020

2,000,000

   39 years

Assume (1) no bonus depreciation, (2) no Section 179 expense for question. 

1. Assume LRRR Corp sold all assets on May 23, 2022. What is LRRR Corps's depreciation expense in 2022?

2. Explain what would be different is the Machine was placed in service on April 12, 2020. 

3. If bonus depreciation is taken on all eligible assets, what is the total depreciation for 2020?

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