5.On May 11, 2012, your calendar year firm purchases for $10,000 a used office machine with an estimated salvage value of $1,000. If the machine is the only fixed asset purchased in 2012 and no Section 179 deduction is taken, what is your firms maximum 2012 deduction for depreciation?

a. $6,000

b. $1,429

c. $2,000

d. $5,715

6. Depreciation of fixed assets under GAAP v. for tax purposes is based on:

a.original cost less salvage value under GAAP v. original cost for tax purposes.

b.original cost for GAAP v. the original cost less salvage value for tax purposes.

c.original cost less the salvage value both under GAAP and for tax purposes.

d.original cost both under GAAP and for tax purposes.

7.Generally, under MACRS, the recovery period for a computer is:

a.3 years

b.4 years

c.5 years

d.7 years

8.Under MACRS, the recovery period for commercial real estate placed in service in 2012 is:

a.31 years

b.27 years

c.39 years

d.7 years

9.Under MACRS, the recovery period for residential real property is:

a.31 years

b.27 years

c.39 years

d.7 years

10.Generally, under MACRS, the recovery period for machinery is:

a.3 years

b.4 years

c.5 years

d.7 years