Required information Problem 10-54 (LO 10-2, LO 10-3) (Algo) 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 Date Placed in Service October 25 February 3 March 17 April 22 Machinery Computer equipment Delivery truck* Furniture Total *The delivery truck is not a luxury automobile. Original Basis $ 96,000 36,000 49,000 176,000 $ 357,000 In addition to these assets, Convers installed new flooring (qualified improvement property) to its office building on May 12 at a cost of $560,000.
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.
Subject: accounting
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Required information
Problem 10-54 (LO 10-2, LO 10-3) (Algo)
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
Date Placed in
Service
October 25
February 3
March 17
April 22
Total
*The delivery truck is not a luxury automobile.
Problem 10-54 Part a (Algo)
MACRS depreciation
Original
Basis
In addition to these assets, Convers installed new flooring (qualified improvement property) to its office building on May 12
at a cost of $560,000.
$ 96,000
36,000
49,000
176,000
$ 357,000
a. What is the allowable MACRS depreciation on Convers's property in the current year assuming Convers does not elect
§179 expense and elects out of bonus depreciation? (Round your intermediate calculations and final answer to the nearest whole
dollar amount.)](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fc7fe5a73-45e4-4166-8ba1-50e355550dfc%2Fb8754d30-b5cf-41d1-8761-be7b98ef4440%2F1s3qez_processed.jpeg&w=3840&q=75)
![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)?](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fc7fe5a73-45e4-4166-8ba1-50e355550dfc%2Fb8754d30-b5cf-41d1-8761-be7b98ef4440%2F9eazthq_processed.jpeg&w=3840&q=75)
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