 Business
29 November, 11:26

# Deirdre's business purchased two assets during the current year (a full 12-month tax year). Deirdre placed in service computer equipment (5-year property) on January 20 with a basis of \$15,000 and machinery (7-year property) on September 1 with a basis of \$15,000. Calculate the maximum depreciation expense, (ignoring §179 and bonus depreciation). (Use MACRS Half-Year Convention) (Round final answer to the nearest whole number.)A. \$6,000.B. \$5,144.C. \$1,286.D. \$5,786.E. None of the choices are correct.

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1. 29 November, 13:21
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D. \$5,786.

Explanation:

The mid-quarter convention applies, so the calculation of property and the machinery is 4 quarter property.

depreciation expense on property = \$15000*0.35

= \$2520

depreciation expense on machinery = 15000*0.0357

= \$536

total depreciation expense = \$5250 + \$536

= \$5786

Therefore, The maximum depreciation expense, (ignoring §179 and bonus depreciation). (Use MACRS Half-Year Convention) is \$5786