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Posted on Aug 13, 2024

Required Information Problem 10-53 (LO 10-2, LO 10-3) [The following Information applies to the questions displayed below.) Evergreen Corporation (calendar-year-end) acquired the following assets during

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Required Information Problem 10-53 (LO 10-2, LO 10-3) [The following Information applies to the questions displayed below.) Evergreen Corporation (calendar-year-end) acquired the following assets during the current year: (Ignore $179 expense and bonus depreciation for this problem): (Use MACRS Table 1 and Table 2.) Asset Machinery Computer equipment Used delivery truck* Furniture Date Placed in Service October 25 February 3 August 17 April 22 Original Basis $ 118,000 46,000 59,000 210,000 *The delivery truck is not a luxury automobile Problem 10-53 Part b b. What is the allowable MACRS depreciation on Evergreen's property in the current year if Evergreen does not elect out of bonus depreciation? MACRS depreciation Table 1 MACRS Half-Year Convention 6.93 Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10 Year 11 Year 12 Year 13 Year 14 Year 15 Year 16 Year 17 Depreciation Rate for Recovery Period 3-Year 5-Year 7-Year 10-Year 15-Year 33.33% 20.00% 14.29% 10.00% 5.00% 44.45 32.00 24.49 18.00 9.50 14.81 19.20 17.49 14.40 8.55 7.41 11.52 12.49 11.52 7.70 11.52 8.93 9.22 5.76 8.92 7.37 6.23 8.93 5.90 4.46 5.90 6.56 5.91 6.55 5.90 3.28 5.91 5.90 5.91 5.90 5.91 2.95 6.55 6.55 20-Year 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 Year 18 Year 19 Year 20 Year 21 TABLE 2 MACRS Mid-Quarter Convention: For property placed or service during the first quarter Depreciation Rate for Recovery Period 5-Year 7-Year Year 1 35.00% 25.00% Year 2 26.00 21.43 Year 3 15.60 13:31 Year 4 11.01 10.93 Year 5 11.01 8.75 Year 6 $.14 Year 7 8.75 Years 138 109 TABLE 26 MACRS Mid-Quarter Convention: For property placed in service during the second quarter Depreciation Rate for Recovery Period 5-Year 7-Year Year 1 25.00% 17.85% Year 2 30.00 23.47 Year 3 18.00 16.76 Year 4 11.37 11.07 Years 11.37 3.82 Year 6 4.26 8.87 Year 7 8.87 Years TABLE 2 MACRS Mid-Quarter Convention: For property placed in service dwing the third quarter Depreciation Rate for Recovery Period 5-Year 7-Year Year 1 15.00% 10.71% Year 2 3 4.00 25.51 Year 3 20.40 18.22 Year 4 12.24 13.02 Year 5 11.30 9.30 Year 6 7.06 3.85 Year 7 8.86 Year S 5.53 TABLE 20 MACRS-Aid Quarter Convention: For property placed on service during the fourth quarter Depreciation Rate for Recovery Period S-Year 1 7-Year Year 1 5 .00% 3.57% Year 2 3 8.00 27.55 Year 3 22.80 19.68 Year 4 13.68 14.06 Years 10.94 10104 Year 6 9 .58 8.73 Year 7 3673 Years Required Information Problem 10-53 (LO 10-2, LO 10-3) [The following Information applies to the questions displayed below.) Evergreen Corporation (calendar-year-end) acquired the following assets during the current year: (Ignore $179 expense and bonus depreciation for this problem): (Use MACRS Table 1 and Table 2.) Asset Machinery Computer equipment Used delivery truck* Furniture Date Placed in Service October 25 February 3 August 17 April 22 Original Basis $ 118,000 46,000 59,000 210,000 *The delivery truck is not a luxury automobile Problem 10-53 Part b b. What is the allowable MACRS depreciation on Evergreen's property in the current year if Evergreen does not elect out of bonus depreciation? MACRS depreciation Table 1 MACRS Half-Year Convention 6.93 Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10 Year 11 Year 12 Year 13 Year 14 Year 15 Year 16 Year 17 Depreciation Rate for Recovery Period 3-Year 5-Year 7-Year 10-Year 15-Year 33.33% 20.00% 14.29% 10.00% 5.00% 44.45 32.00 24.49 18.00 9.50 14.81 19.20 17.49 14.40 8.55 7.41 11.52 12.49 11.52 7.70 11.52 8.93 9.22 5.76 8.92 7.37 6.23 8.93 5.90 4.46 5.90 6.56 5.91 6.55 5.90 3.28 5.91 5.90 5.91 5.90 5.91 2.95 6.55 6.55 20-Year 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 Year 18 Year 19 Year 20 Year 21 TABLE 2 MACRS Mid-Quarter Convention: For property placed or service during the first quarter Depreciation Rate for Recovery Period 5-Year 7-Year Year 1 35.00% 25.00% Year 2 26.00 21.43 Year 3 15.60 13:31 Year 4 11.01 10.93 Year 5 11.01 8.75 Year 6 $.14 Year 7 8.75 Years 138 109 TABLE 26 MACRS Mid-Quarter Convention: For property placed in service during the second quarter Depreciation Rate for Recovery Period 5-Year 7-Year Year 1 25.00% 17.85% Year 2 30.00 23.47 Year 3 18.00 16.76 Year 4 11.37 11.07 Years 11.37 3.82 Year 6 4.26 8.87 Year 7 8.87 Years TABLE 2 MACRS Mid-Quarter Convention: For property placed in service dwing the third quarter Depreciation Rate for Recovery Period 5-Year 7-Year Year 1 15.00% 10.71% Year 2 3 4.00 25.51 Year 3 20.40 18.22 Year 4 12.24 13.02 Year 5 11.30 9.30 Year 6 7.06 3.85 Year 7 8.86 Year S 5.53 TABLE 20 MACRS-Aid Quarter Convention: For property placed on service during the fourth quarter Depreciation Rate for Recovery Period S-Year 1 7-Year Year 1 5 .00% 3.57% Year 2 3 8.00 27.55 Year 3 22.80 19.68 Year 4 13.68 14.06 Years 10.94 10104 Year 6 9 .58 8.73 Year 7 3673 Years