Question

Marlena acquired the following new assets during 2017:

Date	Asset		Cost
April 30		Computers	$22,000
August 1		Automobile (GVW rating of over 6,000 pounds)	38,000
December 30		Office furniture	100,000

Marlena does not elect immediate expensing under § 179 or any additional first-year depreciation for 2017.

If required, round your answers to the nearest dollar. Click here to access the depreciation table to use to complete this problem.

a. What MACRS convention applies to the assets?
Half-year

Mid-quarter

Mid-month

Half-year

b. What class of property is each asset for MACRS?
Office furniture, seven-year; automobile, five-year; computers, five-year

Office furniture, five-year; automobile, five-year; computers, five-year

Office furniture, five-year; automobile, three-year; computers, three-year

Office furniture, seven-year; automobile, five-year; computers, five-year

Office furniture, seven-year; automobile, three-year; computers, five-year

c. The cost recovery for the current year is:

Computers:	$
Automobile:	$
Office furniture:	$

Answer 1

a. What MACRS convention applies to the assets?

Ans. Half-year

b. What class of property is each asset for MACRS?

Ans. Office furniture, five-year; automobile, five-year; computers, five-year

c. The cost recovery for the current year is:

Computers	$ 4400
Automobiles	$ 7600
Office Furniture	$ 20,000

Appendix A:

Depreciation for 2017 using Table A:

Computer : $ 22,000 * 20% = $ 4400

Automobile : $ 38,000 * 20% = $ 7600

Office Furniture : $ 1,00,000 * 20% = $ 20,000