[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.)     Date Placed   Original Asset in Service   Basis Machinery October 25 $ 72,000 Computer equipment February 3   11,500 Used delivery truck* August 17   24,500 Furniture April 22   152,500     *The delivery truck is not a luxury automobile.     b. What is the allowable MACRS depreciation on Evergreen’s property in the current year if Evergreen does not elect out of bonus depreciation?   Table 1 MACRS Half-Year Convention Depreciation Rate for Recovery Period   3-Year 5-Year 7-Year 10-Year 15-Year 20-Year Year 1   33.33%   20.00%   14.29%   10.00%   5.00%   3.750% Year 2  44.45 32.00 24.49 18.00 9.50 7.219 Year 3  14.81 19.20 17.49 14.40 8.55 6.677 Year 4    7.41 11.52 12.49 11.52 7.70 6.177 Year 5   11.52   8.93   9.22 6.93 5.713 Year 6     5.76   8.92   7.37 6.23 5.285 Year 7       8.93   6.55 5.90 4.888 Year 8       4.46   6.55 5.90 4.522 Year 9         6.56 5.91 4.462 Year 10         6.55 5.90 4.461 Year 11         3.28 5.91 4.462 Year 12         5.90 4.461 Year 13         5.91 4.462 Year 14         5.90 4.461 Year 15         5.91 4.462 Year 16         2.95 4.461 Year 17           4.462 Year 18           4.461 Year 19           4.462 Year 20           4.461 Year 21           2.231 TABLE 2a MACRS Mid-Quarter Convention: For property placed in 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 15.31 Year 4 11.01 10.93 Year 5 11.01 8.75 Year 6 1.38 8.74 Year 7   8.75 Year 8   1.09 TABLE 2b 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 11.97 Year 5 11.37 8.87 Year 6 4.26 8.87 Year 7   8.87 Year 8   3.34 TABLE 2c MACRS Mid-Quarter Convention: For property placed in service during the third quarter Depreciation Rate for Recovery Period   5-Year 7-Year Year 1    15.00%    10.71% Year 2 34.00 25.51 Year 3 20.40 18.22 Year 4 12.24 13.02 Year 5 11.30 9.30 Year 6  7.06  8.85 Year 7    8.86 Year 8    5.53 TABLE 2d MACRS-Mid Quarter Convention: For property placed in service during the fourth quarter Depreciation Rate for Recovery Period   5-Year 7-Year Year 1      5.00%      3.57% Year 2 38.00 27.55 Year 3 22.80 19.68 Year 4 13.68 14.06 Year 5 10.94 10.04 Year 6  9.58   8.73 Year 7     8.73 Year 8     7.64

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[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.)

 

  Date Placed   Original
Asset in Service   Basis
Machinery October 25 $ 72,000
Computer equipment February 3   11,500
Used delivery truck* August 17   24,500
Furniture April 22   152,500

 

 

*The delivery truck is not a luxury automobile.

 

 

b. What is the allowable MACRS depreciation on Evergreen’s property in the current year if Evergreen does not elect out of bonus depreciation?

 

Table 1 MACRS Half-Year Convention

Depreciation Rate for Recovery Period
  3-Year 5-Year 7-Year 10-Year 15-Year 20-Year
Year 1   33.33%   20.00%   14.29%   10.00%   5.00%   3.750%
Year 2  44.45 32.00 24.49 18.00 9.50 7.219
Year 3  14.81 19.20 17.49 14.40 8.55 6.677
Year 4    7.41 11.52 12.49 11.52 7.70 6.177
Year 5   11.52   8.93   9.22 6.93 5.713
Year 6     5.76   8.92   7.37 6.23 5.285
Year 7       8.93   6.55 5.90 4.888
Year 8       4.46   6.55 5.90 4.522
Year 9         6.56 5.91 4.462
Year 10         6.55 5.90 4.461
Year 11         3.28 5.91 4.462
Year 12         5.90 4.461
Year 13         5.91 4.462
Year 14         5.90 4.461
Year 15         5.91 4.462
Year 16         2.95 4.461
Year 17           4.462
Year 18           4.461
Year 19           4.462
Year 20           4.461
Year 21           2.231

TABLE 2a MACRS Mid-Quarter Convention: For property placed in 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 15.31
Year 4 11.01 10.93
Year 5 11.01 8.75
Year 6 1.38 8.74
Year 7   8.75
Year 8   1.09

TABLE 2b 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 11.97
Year 5 11.37 8.87
Year 6 4.26 8.87
Year 7   8.87
Year 8   3.34

TABLE 2c MACRS Mid-Quarter Convention: For property placed in service during the third quarter

Depreciation Rate for Recovery Period
  5-Year 7-Year
Year 1    15.00%    10.71%
Year 2 34.00 25.51
Year 3 20.40 18.22
Year 4 12.24 13.02
Year 5 11.30 9.30
Year 6  7.06  8.85
Year 7    8.86
Year 8    5.53

TABLE 2d MACRS-Mid Quarter Convention: For property placed in service during the fourth quarter

Depreciation Rate for Recovery Period
  5-Year 7-Year
Year 1      5.00%      3.57%
Year 2 38.00 27.55
Year 3 22.80 19.68
Year 4 13.68 14.06
Year 5 10.94 10.04
Year 6  9.58   8.73
Year 7     8.73
Year 8     7.64
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