During the year, Garbin Corporation (a calendar-year corporation that manufactures furniture) purchased the following assets: In computing depreciation of these assets, which of the following averaging conventions will be used?

Question

During the year, Garbin Corporation (a calendar-year corporation that manufactures furniture) purchased the following assets:  In computing depreciation of these assets, which of the following averaging conventions will be used?

Quizplus · Accepted Answer

Since Garbin Corporation is a calendar-year corporation, it is subject to the half-year convention. Therefore, option A is correct. The mid-month convention will also be used to accurately calculate the depreciation. The mid-quarter convention would only be used if more than 40% of the assets were purchased in the last quarter of the year, which is not the case here. Therefore, option B and C are not the best choices, and option D is not relevant.

During the Year, Garbin Corporation (A Calendar-Year Corporation That Manufactures