The mid-quarter convention applies. The computer is 4th quarter property and the furniture is 2nd quarter property. The calculations are $15,000 × .05 = $750 and $11,000 × .1785 = $1,964. The total is $2,714 ($750 + $1,964). AACSB: Analytic AACSB: Reflective Thinking AICPA BB: Critical Thinking Blooms: Analyze Learning Objective: 02-02 Determine the applicable cost recovery (depreciation) life; method; and convention for tangible personal and real property and calculate the deduction allowable under basic MACRS. Level of Difficulty: 2 Medium 53. LLC purchased furniture (7-year property) on April 20 with a basis of $20,000 and used the mid-quarter convention. During the current year, which is the fourth year Tasha LLC owned the property, the property was disposed of on December 15. Calculate the maximum depreciation expense, rounding to a whole number: The mid-quarter convention applies. The property was placed in service during the 2nd quarter. The calculations are $20,000 × .1197 = $2,394 × 10.5/12 = $2,095 since the property was disposed of during the 4th quarter. AACSB: Analytic AACSB: Reflective Thinking AICPA BB: Critical Thinking Blooms: Analyze Learning Objective: 02-02 Determine the applicable cost recovery (depreciation) life; method; and convention for tangible personal and real property and calculate the deduction allowable under basic MACRS. Level of Difficulty: 3 Hard 54. Anne LLC purchased computer equipment (5-year property) on August 29 with a basis of $30,000 and used the half-year convention. During the current year, which is the fourth year Anne LLC owned the property, the property was disposed of on January 15. Calculate the maximum depreciation expense:
The mid-quarter convention applies. The computer is 4th quarter property and the furniture is 2nd quarter property. The calculations are $15,000 × .05 = $750 and $11,000 × .1785 = $1,964. The total is $2,714 ($750 + $1,964). AACSB: Analytic AACSB: Reflective Thinking AICPA BB: Critical Thinking Blooms: Analyze Learning Objective: 02-02 Determine the applicable cost recovery (depreciation) life; method; and convention for tangible personal and real property and calculate the deduction allowable under basic MACRS. Level of Difficulty: 2 Medium 53. LLC purchased furniture (7-year property) on April 20 with a basis of $20,000 and used the mid-quarter convention. During the current year, which is the fourth year Tasha LLC owned the property, the property was disposed of on December 15. Calculate the maximum depreciation expense, rounding to a whole number: The mid-quarter convention applies. The property was placed in service during the 2nd quarter. The calculations are $20,000 × .1197 = $2,394 × 10.5/12 = $2,095 since the property was disposed of during the 4th quarter. AACSB: Analytic AACSB: Reflective Thinking AICPA BB: Critical Thinking Blooms: Analyze Learning Objective: 02-02 Determine the applicable cost recovery (depreciation) life; method; and convention for tangible personal and real property and calculate the deduction allowable under basic MACRS. Level of Difficulty: 3 Hard 54. Anne LLC purchased computer equipment (5-year property) on August 29 with a basis of $30,000 and used the half-year convention. During the current year, which is the fourth year Anne LLC owned the property, the property was disposed of on January 15. Calculate the maximum depreciation expense:
Test-Bank-for-Taxation-of-Business-Entities-5th-Edition-by-Spilker.docx