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?
A) Half-year and mid-month
B) Mid-quarter and mid-month
C) Half-year, mid-quarter, and mid-month
D) Mid-quarter only

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?
A) Half-year and mid-month 
B) Mid-quarter and mid-month 
C) Half-year, mid-quarter, and mid-month 
D) Mid-quarter only

Quizplus · Accepted Answer

The assets listed are all depreciable assets and under the Modified Accelerated Cost Recovery System (MACRS), the half-year convention is used for all assets (except for certain real property) in which the asset is considered to be placed in service in the middle of the tax year. Additionally, the mid-month convention is used to determine the depreciation for the first and last months of service for all assets. Therefore, the best choice for averaging conventions to be used for computing depreciation of these assets is A) Half-year and mid-month.

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