Problem 10-48 (LO 10-2) (Algo) Skip to question [The following information applies to the questions displayed below.] At the beginning of the year, Anna began a calendar-year business and placed in service the following assets during the year: Asset Date Acquired Cost Basis Computers 1/30 $ 47,500 Office desks 2/15 $ 51,500 Machinery 7/25 $ 94,500 Office building 8/13 $ 426,000 Assuming Anna does not elect §179 expensing and elects not to use bonus depreciation, answer the following questions: (Use MACRS Table 1, Table 2, Table 3, Table 4 and Table 5.) (Do not round intermediate calculations. Round your final answers to the nearest whole dollar amount.) a. What is Anna’s year 1 cost recovery for each asset? b. What is Anna’s year 2 cost recovery for each asset?
Problem 10-48 (LO 10-2) (Algo) Skip to question [The following information applies to the questions displayed below.] At the beginning of the year, Anna began a calendar-year business and placed in service the following assets during the year: Asset Date Acquired Cost Basis Computers 1/30 $ 47,500 Office desks 2/15 $ 51,500 Machinery 7/25 $ 94,500 Office building 8/13 $ 426,000 Assuming Anna does not elect §179 expensing and elects not to use bonus depreciation, answer the following questions: (Use MACRS Table 1, Table 2, Table 3, Table 4 and Table 5.) (Do not round intermediate calculations. Round your final answers to the nearest whole dollar amount.) a. What is Anna’s year 1 cost recovery for each asset? b. What is Anna’s year 2 cost recovery for each asset?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Problem 10-48 (LO 10-2) (Algo)
Skip to question
[The following information applies to the questions displayed below.]
At the beginning of the year, Anna began a calendar-year business and placed in service the following assets during the year:
Asset | Date Acquired | Cost Basis |
---|---|---|
Computers | 1/30 | $ 47,500 |
Office desks | 2/15 | $ 51,500 |
Machinery | 7/25 | $ 94,500 |
Office building | 8/13 | $ 426,000 |
Assuming Anna does not elect §179 expensing and elects not to use bonus depreciation, answer the following questions: (Use MACRS Table 1, Table 2, Table 3, Table 4 and Table 5.) (Do not round intermediate calculations. Round your final answers to the nearest whole dollar amount.)
a. What is Anna’s year 1 cost recovery for each asset?
b. What is Anna’s year 2 cost recovery for each asset?
![TABLE 5 Nonresidential Real Property Mid-Month Convention Straight Line-39 Years (for assets placed in service on or after May 13, 1993)
Month Property Placed in Service
Month 1
Month 2
Month 3
Month 4
Month 5
Month 6
Month 7
Month 8
Month 9
Month 10
Month 11
Month 12
Year 1
2.461%
2.247%
2.033%
1.819%
1.605%
1.391%
1.177%
0.963%
0.749%
0.535%
0.321%
0.107%
Year 2-39
2.564
2.564
2.564
2.564
2.564
2.564
2.564
2.564
2.564
2.564
2.564
2.564
Year 40
0.107
0.321
0,535
0.749
0.963
1.177
1.391
1.605
1.819
2.033
2.247
2.461](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F5156924f-786e-44f1-8bc0-77ee8c6460f4%2Fa173211f-17ad-4fd8-906d-1383147a6035%2F7683cca_processed.png&w=3840&q=75)
Transcribed Image Text:TABLE 5 Nonresidential Real Property Mid-Month Convention Straight Line-39 Years (for assets placed in service on or after May 13, 1993)
Month Property Placed in Service
Month 1
Month 2
Month 3
Month 4
Month 5
Month 6
Month 7
Month 8
Month 9
Month 10
Month 11
Month 12
Year 1
2.461%
2.247%
2.033%
1.819%
1.605%
1.391%
1.177%
0.963%
0.749%
0.535%
0.321%
0.107%
Year 2-39
2.564
2.564
2.564
2.564
2.564
2.564
2.564
2.564
2.564
2.564
2.564
2.564
Year 40
0.107
0.321
0,535
0.749
0.963
1.177
1.391
1.605
1.819
2.033
2.247
2.461
![Table 1 MACRS Half-Year Convention
Depreciation Rate for Recovery Period
3-Year
5-Year
7-Year
10-Year
15-Year
20-Year
Year 1
33.33%
20.00%
14.29%
10.00%
5.00%
3.750%
Year 2
44.45
32.00
24.49
18.00
9.50
7.219
Year 3
14.81
19.20
17.49
14.40
8.55
6.677
Year 4
7.41
11.52
12.49
11.52
7.70
6.177
Year 5
11.52
8.93
9.22
6.93
5.713
Year 6
5.76
8.92
7.37
6.23
5.285
Year 7
8.93
6.55
5.90
4.888
Year 8
4.46
6.55
5.90
4.522
Year 9
6.56
5.91
4.462
Year 10
6.55
5.90
4.461
Year 11
3.28
5.91
4.462
Year 12
5.90
4.461
Year 13
5.91
4.462
Year 14
5.90
4.461
Year 15
5.91
4.462
Year 16
2.95
4.461
Year 17
4.462
Year 18
4.461
Year 19
4.462
Year 20
4.461
Year 21
2.231](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F5156924f-786e-44f1-8bc0-77ee8c6460f4%2Fa173211f-17ad-4fd8-906d-1383147a6035%2Fbsrm8o_processed.png&w=3840&q=75)
Transcribed Image Text:Table 1 MACRS Half-Year Convention
Depreciation Rate for Recovery Period
3-Year
5-Year
7-Year
10-Year
15-Year
20-Year
Year 1
33.33%
20.00%
14.29%
10.00%
5.00%
3.750%
Year 2
44.45
32.00
24.49
18.00
9.50
7.219
Year 3
14.81
19.20
17.49
14.40
8.55
6.677
Year 4
7.41
11.52
12.49
11.52
7.70
6.177
Year 5
11.52
8.93
9.22
6.93
5.713
Year 6
5.76
8.92
7.37
6.23
5.285
Year 7
8.93
6.55
5.90
4.888
Year 8
4.46
6.55
5.90
4.522
Year 9
6.56
5.91
4.462
Year 10
6.55
5.90
4.461
Year 11
3.28
5.91
4.462
Year 12
5.90
4.461
Year 13
5.91
4.462
Year 14
5.90
4.461
Year 15
5.91
4.462
Year 16
2.95
4.461
Year 17
4.462
Year 18
4.461
Year 19
4.462
Year 20
4.461
Year 21
2.231
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