Required information Convers Corporation (calendar year-end) acquired the following assets during the current tax year: (ignore §179 expense and bonus depreciation for this problem): (Use MACRS Table 1, Table 2, and Table 5.) Asset Machinery Computer equipment Delivery truck* Furniture Total Date Placed in Original Service Basis October 25 February 3 March 17 April 22 MACRS depreciation $ 70,000 10,000 23,000 150,000 $ 253,000 *The delivery truck is not a luxury automobile. In addition to these assets, Convers installed qualified real property (MACRS, 15 year, 150% DB) on May 12 at a cost of $300,000. What is the allowable MACRS depreciation on Convers's property in the current year assuming Convers does not elect out f bonus depreciation (but does not take §179 expense)?
Required information Convers Corporation (calendar year-end) acquired the following assets during the current tax year: (ignore §179 expense and bonus depreciation for this problem): (Use MACRS Table 1, Table 2, and Table 5.) Asset Machinery Computer equipment Delivery truck* Furniture Total Date Placed in Original Service Basis October 25 February 3 March 17 April 22 MACRS depreciation $ 70,000 10,000 23,000 150,000 $ 253,000 *The delivery truck is not a luxury automobile. In addition to these assets, Convers installed qualified real property (MACRS, 15 year, 150% DB) on May 12 at a cost of $300,000. What is the allowable MACRS depreciation on Convers's property in the current year assuming Convers does not elect out f bonus depreciation (but does not take §179 expense)?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Depreciation Methods
The word "depreciation" is defined as an accounting method wherein the cost of tangible assets is spread over its useful life and it usually denotes how much of the assets value has been used up. The depreciation is usually considered as an operating expense. The main reason behind depreciation includes wear and tear of the assets, obsolescence etc.
Depreciation Accounting
In terms of accounting, with the passage of time the value of a fixed asset (like machinery, plants, furniture etc.) goes down over a specific period of time is known as depreciation. Now, the question comes in your mind, why the value of the fixed asset reduces over time.
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Transcribed Image Text:Required information
Convers Corporation (calendar year-end) acquired the following assets during the current tax year: (ignore §179
expense and bonus depreciation for this problem): (Use MACRS Table 1, Table 2, and Table 5.)
Asset
Machinery
Computer equipment
Delivery truck*
Furniture
Total
Date Placed in Original
Service
Basis
$ 70,000
10,000
23,000
150,000
$ 253,000
October 25
February 3
MACRS depreciation
March 17
April 22
*The delivery truck is not a luxury automobile.
In addition to these assets, Convers installed qualified real property (MACRS, 15 year, 150% DB) on May 12 at a cost
of $300,000.
b. What is the allowable MACRS depreciation on Convers's property in the current year assuming Convers does not elect out
of bonus depreciation (but does not take §179 expense)?
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