Problem 8-36 (a) (LO. 2)

Chandler acquired the following new assets during 2019:

Date Asset Cost

February 1 Agricultural machinery and equipment $75,000

September 3 Calculators 18,000

December 1 Trucks (not subject to any depreciation limitation) 95,000

Chandler does not elect immediate expensing under 179 but takes the additional first-year depreciation for the agricultural machinery and equipment and calculators.

Click here to access the depreciation table to use for this problem. (Listed Below)

a.What MACRS convention applies to the assets?

Mid-quarter

b.What class of property is each asset for MACRS?

Agricultural machinery - seven years, calculators - five years, Trucks - five years

c.The cost recovery for the current year is:

Agricultural machinery and equipment: $

Calculators: $

Trucks: $

Exhibit 8.4

MACRS Accelerated Depreciation for Personal Property Assuming Mid-Quarter Convention (Percentage Rates)

For Property Placed in Service after December 31, 1986 (Partial Table)

3-Year

Recovery Year First Quarter Second Quarter Third Quarter Fourth Quarter

1 58.33 41.67 25.00 8.33

2 27.78 38.89 50.00 61.11

5-Year

Recovery Year First Quarter Second Quarter Third Quarter Fourth Quarter

1 35.00 25.00 15.00 5.00

2 26.00 30.00 34.00 38.00

7-Year

Recovery Year First Quarter Second Quarter Third Quarter Fourth Quarter

1 25.00 17.85 10.71 3.57

2 21.43 23.47 25.51 27.55