Question
9-32 Mid-Quarter Convention. Q Corporation anticipates purchasing $300,000 of office furniture and fixtures (seven-year property) next year. This will be Qs only personal property acquisition
9-32 Mid-Quarter Convention. Q Corporation anticipates purchasing $300,000 of office furniture and fixtures (seven-year property) next year. This will be Qs only personal property acquisition for the year. Q Corporation management is willing to purchase and place the property in service any time during the year to accelerate its depreciation deductions. In addition, management wants to depreciate the property as rapidly as possible. MACRS depreciation tables are located in the Appendix. Ignore limited expensing. a. Compute depreciation for the first two years of ownership assuming all of the property is purchased and placed in service on February 2. b. Compute depreciation for the first two years of ownership assuming all of the property is purchased and placed in service on December 6. c. Compute depreciation for the first two years of ownership assuming $177,000 (59%) of the property is purchased and placed in service on February 2 and $123,000 (41%) is purchased and placed in service on December 6. d. Based on the results of (a) through (c) above, what course of action do you recommend for Q Corporation?
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