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Part A Way Corporation disposed of the following tangible personal property assets in the current year Date Date Sold 5/12/13 7/15/19 Original Basis $ 55,000

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Part A Way Corporation disposed of the following tangible personal property assets in the current year Date Date Sold 5/12/13 7/15/19 Original Basis $ 55,000 Acquired Asset Convention Furniture (7-year) Machinery (7-year) Delivery truck* (5- year) Machinery (7-year) 10/11/17 8/11/19 Computer (5-year) HY 3/23/14 3/15/19 72,000 9/17/16 3/13/19 HY 20,000 250,000 80,000 O HY 2/11/1912/15/19 *Used 100 percent for business. Assume that the delivery truck is not a luxury auto. Calculate Way Corporation's 2019 depreciation expense (Way has not used 179 expense and bonus depreciation in past years and elects not to do so this year as well). Be sure to show your work if you want any partial credit. Part B Two years ago, Bethesda Corporation bought a delivery truck for $30,000 (not subject to the luxury auto depreciation limits). Bethesda used MACRS 200 percent declining balance and the half-year convention to recover the cost of the truck, but it did not elect $179 expensing or eligible bonus depreciation. Answer the questions for the following alternative scenarios. a. Assuming Bethesda used the truck until it sold it in March of year 3, what depreciation expense can it claim on the truck for years 1 through 3? b. Assume that Bethesda claimed $18,500 of depreciation expense on the truck before it sold it in year 3. What is the amount and character of the gain or loss if Bethesda sold the truck in year 3 for $17,000, and incurred $2,000 of selling expenses on the sale? c. Assume that Bethesda claimed $18,500 of depreciation expense on the truck before it sold it in year 3. What is the amount and character of the gain or loss if Bethesda sold the truck in year 3 for $35,000, and incurred $3,000 of selling expenses on the sale? d. Assume that Bethesda claimed $18,500 of depreciation expense on the truck before it sold it in year 3. What is the amount and character of the gain or loss if Bethesda sold the truck in year 3 for $7,000, and incurred $2,000 of selling expenses on the sale

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