Wheeler LLC purchased two assets during the current year. Wheeler placed in service computer equipment (5-year property) on November 16 with a basis of $15,000 and furniture (7-year property) on April 20 with a basis of $11,000. Calculate the maximum depreciation expense, rounding to a whole number (ignoring §179 and bonus depreciation):
A) $1,285
B) $2,714
C) $4,572
D) $5,200
E) None of these

Question

Quizplus · Accepted Answer

The maximum depreciation expense is calculated using the MACRS half-year convention. For the computer equipment, the depreciation is $15,000 * 20% = $3,000. For the furniture, the depreciation is $11,000 * 14.29% = $1,571. Total depreciation is $3,000 + $1,571 = $4,571, but rounding to the nearest whole number gives $4,572.

Wheeler LLC Purchased Two Assets During the Current Year