Paul purchased a new office computer system on February 15, 2016, at a cost of 8300....

Paul purchased a new office computer system on February 15, 2016, at a cost of 8300. He would like to use the General Depreciation System (GDS) straight-line method to depreciate the system and does not want to claim bonus depreciation. Using the half-year convention, compute his 2016 and 2017 depreciation. a. His 2016 Depreciation is $1,660, and his 2017 is $2,656 b. His 2016 is $1453 and 2017 is $1660. c. 2016 is $830 and 2017 is $1660 d. 2016 is $691 and 2017 is $1,384

Expert Solution

The Answer is Choice – C = $ 830 & $ 1660

GENERAL DEPRECIATION SYSTEM (GDS) STRAIGHT-LINE SCHEDULE

Cost = $ 8300

Date = February 15, 2016

Period = 5 Years

Method = Straight Line Method

Convention = Half-Year Convention

Year	Opening Value	Rate (%)	Depreciation	Ending Book Value
2016	8300	10	830	7470
2017	7470	20	1660	5810
2018	5810	20	1660	4150
2019	4150	20	1660	2490
2020	2490	20	1660	830
2021	830	10	830	0

Depreciation for the Year 2016 = $ 830

Depreciation for the Year 2017 = $ 1660

ekkarill92 answered 2 years ago

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