DLW Corporation acquired and placed in service the following assets during the y

Question

DLW Corporation acquired and placed in service the following assets during the year:

Assuming DLW does not elect §179 expensing or bonus depreciation, answer the following questions: (Use MACRS Table 1, Table 2, Table 3, Table 4 and Table 5.) (Do not round intermediate calculations. Round your final answers to the nearest whole dollar amount.)

b. What is DLW's year 3 cost recovery for each asset if DLW sells all of these assets on 2/27 of year 3?

Date Cost Asset Acquired Basis Computer equipment 3/4 $ 18,200 Furniture 3/28 20,300 Commercial building 10/14 306,000

Explanation / Answer

Part B

Computer equipment =18200*50%*19.20%=1747

Furniture =20300*50%*17.49%=1775

Commercial Building = 306000*12.50%*2.56%=981

Asset original basis recovery period rate portion of year depreciation expense Computer equipment 18200 5 years 19.20% 50% 1747 Furniture 20300 7 years 17.49% 50% 1775 Commercial Building 306000 39 years 2.56% 12.50% 981 Total depreciation expense 4503

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