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Compute regular depreciation for the following qualified assets. Ignore bonus depreciation and section 179. a.) Business...

  1. Compute regular depreciation for the following qualified assets. Ignore bonus depreciation and section 179.
  • a.) Business equipment purchased in February for $40,000 which has salvage value of $4,000.
  • b.) Business car purchased in May for 22,000 which has a salvage value of $3,000.
  • c.) Business equipment purchased in May for $150,000 has a salvage value of $15,000.
  • d.) Business car purchased in April for $42,000 with a salvage value of $5,000.
  • e.) Compute depreciation for residential real estate purchased in January for $390,000 with a salvage value of $50,000.

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Expert Solution

Answer:
1 Business equipment purchased in February for $40,000 which has salvage value of $4,000.
Purchase price 40000
period of depreciation 11 months
rate of depreciation 40%
Purchase price 40000
less: salvage value 4000
depreciable value 36000
depreciation(36000*40%*11/12) 13200
2 Business car purchased in May for 22,000 which has a salvage value of $3,000.
Purchase price 22000
period of depreciation 8 months
rate of depreciation 15%
Purchase price 22000
less: salvage value 3000
depreciable value 19000
depreciation(19000*15%*8/12) 1900
3 Business equipment purchased in May for $150,000 has a salvage value of $15,000.
Purchase price 150000
period of depreciation 8 months
rate of depreciation 40%
Purchase price 150000
less: salvage value 15000
depreciable value 135000
depreciation(135000*40%*8/12) 36000
4 Business car purchased in April for $42,000 with a salvage value of $5,000.
Purchase price 42000
period of depreciation 9 months
rate of depreciation 15%
Purchase price 42000
less: salvage value 5000
depreciable value 37000
depreciation(37000*15%*9/12) 4162.5
5

Compute depreciation for residential real estate purchased in January for $390,000 with a salvage value of $50,000.
Purchase price 390000
period of depreciation 12 months
rate of depreciation
depreciation exp for the year 14181.82

ekkarill92 answered 1 year ago
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