16,100 2022... 9,700
Financial Accounting Intro Concepts Meth/Uses
14th Edition
ISBN:9781285595047
Author:Weil
Publisher:Weil
Chapter10: Long-lived Tangible And Intangible Assets
Section: Chapter Questions
Problem 34P
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Question
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In March 2020, Jones Company purchased a Mercedes for use in its business at a cost of $73,000. Required: Assuming no bonus
2020...$ 10,100
2021... 16,100
2022... 9,700
2023 and subsequent years... 5,760
* Refer to attached images for Table 7-1 and Table 7-2
Transcribed Image Text:In March 2020, Jones Company purchased a Mercedes for use in its business at a cost of $73,000.
Required:
Assuming no bonus depreciation or Section 179 deduction, calculate the allowable tax depreciation on this asset for 2020, 2021, and
2022. Use Table 7-1 and Table 7-2. Use the below table for annual depreciation deduction for year 2020 to 2022:
2020
$ 10,100
2021
16,100
2022
9,700
2023 and subsequent years
5,760
Amount
2020 depreciation
2021 depreciation
2022 depreciation
Transcribed Image Text:TABLE 7.1 Recovery Periods for Tangible Business Assets
MACRS Recovery
Period
3 years
5 years
7 years
10 years
15 years
20 years
25 years
27.5 years
39 years
50 years
TABLE 7.2 MACRS for Business Personalty (Half-Year Convention)
Recovery Period
Year
3-Year
5-Year
7-Year
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
Assets Included
Small manufacturing tools, racehorses and breeding hogs, special handling devices used in food
manufacturing.
Cars, trucks, buses, helicopters, computers, typewriters, duplicating equipment, breeding and
dairy cattle, cargo containers, new farming machinery and equipment.
Office furniture and fixtures, railroad cars and locomotives, most machinery and equipment.
Single-purpose agricultural and horticultural structures; assets used in petroleum refining, vessels,
barges, and other water transportation equipment; fruit- or nut-bearing trees and vines.
Certain building improvements; land improvements such as fencing, roads, sidewalks, bridges,
irrigation systems, and landscaping; telephone distribution plants; pipelines; billboards; and
service station buildings.
Certain farm buildings, municipal sewers.
Commercial water utility property.
Residential rental real property (duplexes and apartments).
Nonresidential real property (office buildings, factories, and warehouses).
Railroad grading or tunnel bore.
10-Year
15-Year
10.00%
5.00%
18.00
9.50
14.40
8.55
11.52
7.70
9.22
6.93
7.37
6.23
6.55
5.90
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
33.33%
44.45
14.81
7.41
20.00%
32.00
19.20
11.52
11.52
5.76
Depreciation Rate
14.29%
24.49
17.49
12.49
8.93
8.92
8.93
4.46
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
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