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Exercise 8-20 (Algorithmic) (LO. 2) Hamlet acquires a 7-year class asset on November 23, 2020, for...

Exercise 8-20 (Algorithmic) (LO. 2) Hamlet acquires a 7-year class asset on November 23, 2020, for $491,400 (the only asset acquired during the year). Hamlet does not elect immediate expensing under § 179. He does not claim any available additional first year depreciation. This is Hamlet's only tangible personal property acquisition for the year. Click here to access the depreciation table to use for this problem. If required, round your answers to the nearest dollar. Calculate Hamlet's cost recovery deduction for 2020 and 2021.

2020: $fill in the blank 1

2021: $fill in the blank 2

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Answer #1

answer

Hamlet acquires a 7-year class asset on November 23, 2020, for = $491,400

Hamlet does not elect immediate expensing under § 179

2020
Depreciation rate for 7 year class property for first year using MCRS tables is 3.57%
So,
Hamlet cost recovery deduction = $ 491,400 x 3.57%
=$ 17542.98
Hamlet cost recovery deduction = $17542 (round off)

2021
Depreciation rate for 7 year class property for first year using MCRS tables is 27.55%
So,
Hamlet cost recovery deduction = $491,400 x 27.55%
= $ 135380.7

= $135380

Hamlet cost recovery deduction = $135380 (round off)


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