Question

Arlington LLC purchased an automobile for $40,000 on July 5, 2017. What is Arlington's depreciation expense...

Arlington LLC purchased an automobile for $40,000 on July 5, 2017. What is Arlington's depreciation expense for 2017 if its business use percentage is 75 percent (ignore any possible bonus depreciation)?

A. 2370

B. 3160

C. 6000

D. 8000

E. None

Business   Accounting   
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Answer #1

Calculation:

Particulars Amount
uxury auto's maximum depreciation in the first year is the lesser of :
a) fixed acount 10,000            10,000.00
b) MACRS amount of ($40,000 × 20%) $8,000
Lesser amount is                8,000.00
business use percentage is 75 percent thus 8000*75%              6,000.00
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