On April 1, 2024, Titan Corporation purchases office equipment for $64,000. For tax reporting, the company uses MACRS and classifies the equipment as five-year personal property. In 2024, this type of equipment is eligible for 60% first-year bonus depreciation. For financial reporting, the company uses straight-line depreciation. Assume the equipment has no residual value. Required: 1. Calculate annual depreciation for the five-year life of the equipment according to MACRS. The company uses the half-year convention for tax reporting purposes. 2. Calculate annual depreciation for the five-year life of the equipment according to straight-line depreciation. The company uses partial-year depreciation based on the number of months the asset is in service for financial reporting purposes. 3. In which year(s) is tax depreciation greater than financial reporting depreciation? Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Calculate annual depreciation for the five-year life of the equipment according to MACRS. The company uses the half-year convention for tax reporting purposes. Note: Round "Depreciation Rate per MACRS" answers to 2 decimal places. Round your final answers to nearest whole dollars.
On April 1, 2024, Titan Corporation purchases office equipment for $64,000. For tax reporting, the company uses MACRS and classifies the equipment as five-year personal property. In 2024, this type of equipment is eligible for 60% first-year bonus depreciation. For financial reporting, the company uses straight-line depreciation. Assume the equipment has no residual value. Required: 1. Calculate annual depreciation for the five-year life of the equipment according to MACRS. The company uses the half-year convention for tax reporting purposes. 2. Calculate annual depreciation for the five-year life of the equipment according to straight-line depreciation. The company uses partial-year depreciation based on the number of months the asset is in service for financial reporting purposes. 3. In which year(s) is tax depreciation greater than financial reporting depreciation? Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Calculate annual depreciation for the five-year life of the equipment according to MACRS. The company uses the half-year convention for tax reporting purposes. Note: Round "Depreciation Rate per MACRS" answers to 2 decimal places. Round your final answers to nearest whole dollars.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:es
On April 1, 2024, Titan Corporation purchases office equipment for $64,000. For tax reporting, the company uses MACRS and
classifies the equipment as five-year personal property. In 2024, this type of equipment is eligible for 60% first-year bonus
depreciation. For financial reporting, the company uses straight-line depreciation. Assume the equipment has no residual value.
Required:
1. Calculate annual depreciation for the five-year life of the equipment according to MACRS. The company uses the half-year
convention for tax reporting purposes.
2. Calculate annual depreciation for the five-year life of the equipment according to straight-line depreciation. The company uses
partial-year depreciation based on the number of months the asset is in service for financial reporting purposes.
3. In which year(s) is tax depreciation greater than financial reporting depreciation?
Complete this question by entering your answers in the tabs below.
Required 1
Year
Calculate annual depreciation for the five-year life of the equipment according to MACRS. The company uses the half-year
convention for tax reporting purposes.
Note: Round "Depreciation Rate per MACRS" answers to 2 decimal places. Round your final answers to nearest whole dollars.
2024
2025
2026
2027
2028
2029
Required 2
Total
Depreciation
Basis for
MACRS
Xx
X
X
X
X
X
Required 3
X
Depreciation
Rate per
MACRS
20.00% =
32.00 %=
19,20 % =
11.52 % =
11.52 % =
5.76 % =
100.00 % -
MACRS
Depreciation
$
0
Bonus
Depreciation
$
$
38,400
38,400
Total
Depreciation
$
0
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