Wheeler LLC purchased two assets during the current year (a full 12-month tax year).On November 16 Wheeler placed in service computer equipment (five-year property)with a basis of $15,000 and on April 20 placed in service furniture (seven-year property)with a basis of $11,000. Calculate the maximum depreciation expense (ignoring §179 and bonus depreciation). (Use MACRS Table 2.)(Round final answer to the nearest whole number.)
A)$1,285
B)$2,714
C)$4,572
D)$5,200
E)None of the choices are correct.

Question

Quizplus · Accepted Answer

The maximum depreciation expense is calculated using the MACRS tables. For the computer equipment (5-year property) placed in service in November, the half-year convention applies, and the first-year rate is 20%. For the furniture (7-year property) placed in service in April, the first-year rate is 14.29%. Therefore, the depreciation for the computer equipment is $15,000 * 20% = $3,000, and for the furniture, it is $11,000 * 14.29% = $1,571.90. The total depreciation is $3,000 + $1,571.90 = $4,571.90, rounded to $4,572.

Wheeler LLC Purchased Two Assets During the Current Year (A