Question
1.Orange Corporation acquired new office furniture on August 15, 2017, for $130,000. Orange does not elect immediate expensing under 179. Orange claims any available additional
1.Orange Corporation acquired new office furniture on August 15, 2017, for $130,000. Orange does not elect immediate expensing under 179. Orange claims any available additional first-year depreciation. Determine Orange's cost recovery for 2017.
If required, round your answer to the nearest dollar. Click here to access Exhibit 8.1 and the depreciation tables in the textbook.
a.What class of property is the office furniture for MACRS?
Seven-year
Seven-year
Five-year
Three-year
b.Orange's cost recovery deduction for 2017 is $.
Debra acquired the following new assets during 2017:
Date
Asset
Cost
April 11
Furniture
$40,000
July 28
Trucks
40,000
November 3
Computers
70,000
Debra does not elect immediate expensing under 179. She does not claim any available additional
first-year depreciation.
If required, round your answers to the nearest dollar.
Click here to access the depreciation tables to use for this problem.
a.What MACRS convention applies to the assets?
Mid-quarter
Mid-quarter
Mid-month
Half-year
b.What class of property is each asset for MACRS?
Furniture:Seven-year
Three-year
Five-year
Seven-year
Trucks:Five-year
Three-year
Five-year
Seven-year
Computers: Five-year
Three-year
Five-year
Seven-year
c.The cost recovery deductions for the current year is:
Furniture:
$
Trucks:
$
Computers:
$
On October 15, 2017, Jon purchased and placed in service a used car. The purchase price was $25,000. This was the only business use asset Jon acquired in 2017. He used the car 80% of the time for business and 20% for personal use. Jon used the MACRS statutory percentage method and does not claim any expense under 179 .
If required, round your answers to the nearest dollar.
Click here to access Exhibit 8.5 of the textbook. Click here to access the limits for certain automobiles.
a.Is the car eligible for additional first-year depreciation?
No
Yes
No
b.What MACRS convention applies to the new car?
Mid-quarter
Mid-quarter
Mid-month
Half-year
c.Is the automobile considered "listed property"?
Yes
Yes
No
d.Does the automobile satisfy the "predominantly used for business" definition?
Yes
Yes
No
e.The total cost recovery deduction Jon may take for 2017 with respect to the car is $
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started
Canadian Cases In Financial Accounting
Authors: Carol E. Dilworth, Joan E. D. Conrod
2nd Edition
256111405, 978-0256111408
