TABLE 2a MACRS Mid-Quarter Convention: For property placed in serviceduring the first quarterTABLE 26 MACRS Mid-Quarter Convention: For property placed in service during thesecond quarterDepreciation Rate for Recovery Period5-Year7-YearYear 125.00%17.85%Year 230.0023.47Year 318.0016.76Year 411.3711.97Year 511378.87Year 64.268.87Year 78.87Year 83.34TABLE 2e MACRS Mid-Quarter Convention: For property placed in service during the thirdquarterDepreciation Rate for Recovery Period5-Year7-YearYear 115.00%10.71%Year 234.0025.51Year 320.4018.22Year 412.2413.02Year 511309.30Year 67.068.85Year 78.86Year 85.53TABLE 2d MACRS-Mid Quarter Convention: For property placed in service during thefourth quarterDepreciation Rate for Recovery Period5-Year7-YearYear 15.00%357%Year 238.0027.55Year 322.8019.68Year 413.6814.06Year 510.9410.04Year 69.588.73 Lina purchased a new car for use in her business during 2021. The auto was the only business asset she purchased duringthe year, and her business was extremely profitable. Calculate her maximum depreciation deductions (including §179expense unless stated otherwise) for the automobile in 2021 and 2022 (Lina doesn't want to take bonus depreciation for2021 or 2022) in the following alternative scenarios (assuming half-year convention for all): (Use MACRS Table 1, Table 2,and Exhibit 10-10.)d. The vehicle cost $92,000, and she used it 80 percent for business. She sold it on March 1 of year 2.DepreciationdeductionYear20212022

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 alI): (Use MACRS Table 1, Table 2, and Exhibit 10-10.) d. The vehicle cost $92,000, and she used it 80 percent for business. She sold it on March 1 of year 2. Depreciation deduction Year 2021 2022

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 alI): (Use MACRS Table 1, Table 2, and Exhibit 10-10.) d. The vehicle cost $92,000, and she used it 80 percent for business. She sold it on March 1 of year 2. Depreciation deduction Year 2021 2022

Individual Income Taxes

43rd Edition

ISBN:9780357109731

Author:Hoffman

Publisher:Hoffman

Chapter8: Depreciation, Cost Recovery, Amortization, And Depletion

Section: Chapter Questions

Problem 7CPA: Which statement below is correct? a. Real property is depreciated using the half-year convention. b....

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Clay LLC placed in service machinery and equipment (seven-year property) with a basis of $3,450,000 on June 6, 2023. Assume that Clay has sufficient income to avoid any limitations. Calculate the maximum depreciation expense including §179 expensing (ignoring any possible bonus depreciation). (Use MACRS Table 1.) Note: Round final answer to the nearest whole number. Multiple Choice $1,160,000 $493,005 $407,265 $1,007,265 None of the choices are correct.
The mid-month convention applies to...
Which statement below is correct? a. Real property is depreciated using the half-year convention. b. Residential real estate is depreciated over a 39-year life. c. One-half month of depreciation is taken for the month real property is disposed of. d. Salvage value is considered in MACRS depreciation.
Instructions Bailand Company purchased a building for $218,000 that had an estimated residual value of $8,000 and an estimated service life of 10 years. Bailand purchased the building 4 years ago and has used straight-line depreciation. At the beginning of the fifth year (before it records depreciation expense for the year), the following independent situations occur: 1. Bailand estimates that the asset has 8 years' life remaining (for a total of 12 years). 2. Bailand changes to the sum-of-the-years'-digits method. 3. Bailand discovers that the estimated residual value has been ignored in the computation of depreciation expense. Required: For each of the independent situations, prepare all the journal entries relating the building for the fifth year. Ignore income taxes.
Depreciation and accounting cash flow A firm in the third year of depreciating its only asset, which originally cost $171,000 and has a 5-year MACRS recovery period i, has gathered the following data relative to the $15,600 124,000 14,300 412,000 70,100 295,000 40% Accruals Current assets Interest expense Sales revenue Inventory Total costs before depreciation, interest and taxes Tax rate on ordinary income a. Use the relevant data to determine the operating cash flow for the current year. b. Explain the impact that depreciation, as well as any other noncash charges, has on a firm's cash flows. a. Complete the following table to determine the operating cash flow (OCF): (Round to the nearest dollar.) Operating Cash Flow Sales revenue Less: Total costs before depreciation, interest, and taxes Depreciation expense Earnings before interest and taxes Less: Taxes at 40% Net operating profit after taxes (NOPAT) Plus: Depreciation Operating Cash Flow (OCF) $ $ $ $
Discussion Question 8-6 (LO. 2) How is cost recovery computed for an asset, in the year it is placed in service, when the mid-quarter convention applies? Enter numerical values as a decimal to one decimal place, if required (i.e. 8.5). If more than % of the value of property, other than is placed in service during quarter of the year, the mid-quarter convention applies. Based on when the asset is placed in service, the first quarter is allowed months of cost recovery; the second quarter is allowed months of cost recovery; the third quarter is allowed months of cost recovery; and, the fourth quarter is allowed months of cost recovery.
Find the depreciation for the fourth year using MACRS cost-recovery rates for the property placed in service at midyear. The property is a 3-year property and was purchased for $90,981. MACRS Table Depreciation rate for recovery period Year 3-Year 5-Year 7-Year 10-Year 15-Year 20-Year 1 33.33 % 20.00 % 14.29 % 10.00 % 5.00 % 3.750 % 2 44.45 32.00 24.49 18.00 9.50 7.219 3 14.81 19.20 17.49 14.40 8.55 6.677 4 7.41 11.52 12.49 11.52 7.70 6.177 5 11.52 8.93 9.22 6.93 5.713 6 5.76 8.92 7.37 6.23 5.285 7 8.93 6.55 5.90 4.888 8 4.46 6.55 5.90 4.522 9 6.56 5.91 4.462…
Sale of Equipment Instructions Chart of Accounts First Questions Journal Instructions Equipment was acquired at the beginning of the year at a cost of $562,500. The equipment was depreciated using the double-declining-balance method based on an estimated useful life of 9 years and an estimated residual value of $49,785. Chart of Accounts CHART OF ACCOUNTS Required: a. What was the depreciation for the first year? Round your intermediate calculations to 4 decimal places. Round the depreciation for the year to the nearest whole dollar. b. Assuming that the equipment was sold at the end of the second year for $557,317, determine the gain or loss on the sale of the equipment. c. Journalize the entry on Dec. 31 to record the sale. Refer to the chart of accounts for the exact wording of the account titles. CNOW journals do not use lines for journal explanations. Every line on a journal page is used for debit or credit entries. CNOW journals will automatically indent a credit entry when a…
Complete the Sum of depreation Useful 8 учет Sum of Sum of years digits method of Depreciation Rate Year 1 Year 3 A 个 Fraction Year 5 ↑
The following tables shows a company's CAPEX forecast in each of the following years: Useful Life of New Assets (years) 15 15 15 Forecast Year 1234 5 Capex in $ Select one: O A. 2.5 OB. 0.5 O C. 1.0 O D. 1.5 52849 15 22 36 15 15 Assuming the use of the mid year convention, what would be the total depreciation expense in Year 1 of the forecast?
Classification of Assets and Liabilities Indicate the appropriate classification of each of the following as a current asset (CA), noncurrent asset (NCA), current liability (CL), or long-term liability (LTL). ______ 1. Inventory ______ 2. Accounts payable ______ 3. Cash ______ 4. Patents ______ 5. Notes payable, due in six months ______ 6. Taxes payable ______ 7. Prepaid rent (for the next nine months) ______ 8. Bonds payable, due in ten years ______ 9. Machinery
Only Ex 9-19 please and thank you!