Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Harris Corp. is a technology start-up currently in its second year of operations. The company didn't purchase any assets this year but purchased the following

image text in transcribed
image text in transcribed
image text in transcribed
Harris Corp. is a technology start-up currently in its second year of operations. The company didn't purchase any assets this year but purchased the following assets in the prior year: Asset office equipment Manufacturing equipment Computer system Total Placed in Service August 14 April 15 June 1 Basis $ 12,000 BB,000 36,000 $ 136,000 Harris did not know depreciation was tax deductible until it hired an accountant this year and didn't claim any depreciation deduction in its first year of operation (Use MACRS Table 1 and Table 2.) a. What is the maximum amount of depreciation deduction Harris Corp, can deduct in its second year of operation? (Leave no answer blank. Enter zero if applicable.) Answer is complete but not entirely correct. Depreciation deduction $ 39,26263 Table 1 MACRS Half-Year Convention Depreciation Rate for Recovery Period 3-Year 5-Year 7-Year 10-Year 15-Year 20-Year 33.33% 20.00% 14.29% 10.00% 5.00% 3.750% Year 1 Year 2 44.45 32.00 24.49 18.00 9.50 7.219 Year 3 14.81 19.20 17.49 14.40 8.55 6.677 Year 4 7.41 11.52 12.49 11.52 7.70 6.177 Year 5 11.52 8.93 9.22 6.93 5.713 Year 6 5.76 8.92 7.37 6.23 5.285 8.93 6.55 5.90 4.888 4.46 6.55 5.90 4.522 Year 7 Year 8 Year 9 Year 10 6.56 5.91 4.462 6.55 5.90 4.461 Year 11 3.28 5.91 4.462 5.90 4.461 Year 12 Year 13 Year 14 Year 15 5.91 4.462 4.461 5.90 5.91 4.462 Year 16 2.95 4.461 4.462 4.461 Year 17 Year 18 Year 19 Year 20 Year 21 4.462 4.461 2.231 * 25.00% 21.43 Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 35.00% 26.00 15.60 11.01 15 31 11.01 10.93 8.75 8.74 1.38 8.75 Year 7 Year 8 1.09 TABLE 26 MACRS Mid-Quarter Convention For property placed in service during the second quarter Depreciation Rate for Recovery Period Year 1 Year 2 5-Year 25.00% 30.00 18.00 11.37 Year 3 Year 4 Year 5 Year 6 7-Year 17.85% 23.47 16.76 11.97 8.87 8.87 8.87 3.34 11.37 426 Year 7 Year 8 TABLE 20 MACRS Mid-Quarter Convention For property placed in senice during the third quarter Depreciation Rate for Recovery Period 5-Year 7-Year Year 1 15.00% 10.71% Year 2 34.00 25,51 Year 3 20.40 18 22 Year 4 12:24 13.02 Year 5 11:30 9.30 Year 6 7.06 8.85 Year 7 8.86 Year B 5.53 TABLE 2d MACRS-Mid Quarter Convention For property placed in sanoe during the fourth quarter Depreciation Rate for Recovery Period 5-Year 7-Year Year 1 5.00% 3.57 Year 2 38.00 27.55 Year 3 22.80 19.58 Year 4 13.68 14.06 Year 5 10.94 10.04 Year 6 9.58 8.73 Year 7 873 Year 8 7,43

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Bank Stability, Sovereign Debt And Derivatives

Authors: Author

1st Edition

113733214X, 9781137332141

More Books

Students also viewed these Accounting questions