Problem 10-54 (LO 10-2, LO 10-3) Convers Corporation (calendar-year-end) acquired the following assets during the current tax year: (ignore $179 expense and bonus depreciation for this problem): (Use MACRS Table 1, Table 2 and Table 5.) Asset Machinery Computer equipment Used delivery truck* Furniture Total Date Placed in Service October 25 February 3 March 17 April 22 Original Basis $ 80,000 $ 20,000 $ 33,000 $ 160,000 $ 293,000 *The delivery truck is not a luxury automobile. In addition to these assets, Convers installed new flooring (qualified improvement property) to its office building on May 12 at a cost of $400,000. Problem 10-54 Part a a. What is the allowable MACRS depreciation on Convers's property in the current year assuming Convers does not elect $179 expense and elects out of bonus depreciation? (Round your intermediate calculations to the nearest whole dollar amount.) MACRS depreciation $ 52,172 TABLE 1 MACRS Half-Year Convention Year 20-Year 2 3-Year 33.33% 44.45 14.81 7.41 3 6 7 Depreciation Rate for Recovery Period 5-Year 7-Year 10-Year 15-Year 20.00% 14.29% 10.00% 5.00% 32.00 24.49 18.00 9.50 19.20 17.49 14.40 8.55 11.52 12.49 11.52 7.70 11.52 8.93 9.22 6.93 5.76 8.92 7.37 6.23 8.93 6.55 5.90 4.46 6.55 5.90 6.56 5.91 6.55 5.90 3.28 5.91 5.90 5.91 5.90 5.91 2.95 10. 11 3.750% 7.219 6.677 6.177 5.713 5.285 4.888 4.522 4.462 4.461 4.462 4.461 4.462 4.461 4.462 4.461 4.462 4.461 4.462 4.461 2.231 12 13 14 15 16 17 18 19 20 21 TABLE 2a MACRS Mid-Quarter Convention: For property placed in service during the first quarter Depreciation Rate for Recovery Period Year 5-Year 2 35.00% 26.00 15.60 11.01 11.01 1.38 7-Year 25.00% 21.43 15.31 10.93 8.75 8.74 8.75 1.09 | 4 5 6 L TABLE 26 MACRS Mid-Quarter Convention: For property placed in service during the second quarte Depreciation Rate for Recovery Period Year 7-Year 1 2 3 5-Year 25.00% 30.00 18.00 11.37 11.37 4.26 4 5 6 17.85% 23.47 16.76 11.97 8.87 8.87 8.87 3.34 7. TABLE 2C MACRS Mid-Quarter Convention: For property placed in service during the third quarter Depreciation Rate for Recovery Period Year 5-Year 2 3. 4 5 6 15.00% 34.00 20.40 12.24 11.30 7.06 7-Year 10.71% 25.51 18.22 13.02 9.30 8.85 8.86 8 5.53 TABLE 5 Nonresidential Real Property Mid-Month Convention Straight Line39 Years (for assets placed in service on or after May 13, 1993) Year 1 2-39 40 2 1 .461% 2.564 0.107 2 2.247% 2.564 0.321 3 2.033% 2.564 0.535 Month Property Placed in Service 4 5 6 7 8 1.819% 1.605% 1.391% 1.177% 0.963% 2.564 2.564 2.564 2.564 2.564 0.7490.963 1.177 1.3911.605 9 0.749% 2.564 1.819 10 0.535% 2.564 2.033 11 0.321% 2.564 2.247