Deirdre's business purchased two assets during the current year.It placed in service computer equipment (5-year property) on January 20 with a basis of $15,000 and machinery (7-year property) on October 1 with a basis of $15,000.Calculate the maximum depreciation expense,rounded to a whole number (ignoring §179 and bonus depreciation) :
A)$1,286
B)$5,144
C)$5,786
D)$6,000
E)None of these

Question

Quizplus · Accepted Answer

The maximum depreciation expense for the computer equipment is $15,000 / 5 years * 10 months = $3,000. The maximum depreciation expense for the machinery is $15,000 / 7 years * 3 months = $2,786. The total maximum depreciation expense is $3,000 + $2,786 = $5,786.

Deirdre's Business Purchased Two Assets During the Current Year