Question

ESTION 6

Way Corporation disposed of the following tangible personal property assets in the current year. Assume that the delivery truck is not a luxury auto. Calculate Way Corporation’s 2017 depreciation expense (ignore §179 expense and bonus depreciation for this problem).  

Asset	Date acquired		Date sold	Convention	Original Basis
Furniture (7 year)	5/12/13		7/15/17	HY	$60,000
Machinery (7 year)	3/23/14		3/15/17	MQ	$72,000
Delivery truck* (5 year)	9/17/15		3/13/17	HY	$20,000
Machinery (7 year)	10/11/16		8/11/17	MQ	$280,000
Computer (5 year)	10/11/17		12/15/17	HY	$80,000
*Used 100 percent for business.

Answer 1

Asset	Basis	Convention	MACRS %	Portion of Full Year Depreciation allowed in case of disposal of asset	Depreciation
	1	2	3	4	1*3*4
Furniture	60000	HY	8.93%	50%	2679
Machinery	72000	MQ	10.93%	12.50%	983.7
				Disposed in 1st Qtr
Delivery truck	20000	HY	19.20%	50%	1920
Machinery	280000	MQ	27.55%	62.50%	48212.5
				Disposed in 3rd Qtr
Computer	80000	HY	0%*	50%	0
Total					53795.2
* No depreciation for asset acquired and sold in the same year