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[The following information applies to the questions displayed below.] At the beginning of the year, Miranda...

[The following information applies to the questions displayed below.]

At the beginning of the year, Miranda began a calendar-year business and placed in service the following assets during the year:

Date Cost
Asset Placed in Service Basis
Computers 1/30 $ 46,000
Office desks 2/15 $ 50,000
Machinery 7/25 $ 93,000
Office building 8/13 $ 424,000

Assuming Miranda elects out of bonus depreciation and does not elect §179 expensing , 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.)

rev: 11_08_2019_QC_CS-189757

b. What is Miranda’s year 2 cost recovery for each asset?


    

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Answer #1

Requirement b: Compute the cost recovery in year two of each asset as follows

Particulars Purchase Date Quarter Recovery Period Original Basis (a) Rate (b) Cost Recovery (a) × (b)
Computers Jan. 30 1st 5 $46,000 32.00% $14,720
Office desks Feb. 15 1st 7 $50,000 24.49% $12,245
Machinery Jul. 25 3rd 7 $93,000 24.49% $22,775.7
Office building Aug. 13 3rd 39 $424,000 2.564% $10,871.36
Total cost recovery in year two (nearest whole dollar) $60,612

Note: 2.564% (1÷39)

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