【導(dǎo)讀】DEPRECIATION,COSTRECOVERY,AMORTIZATION,ANDDEPLETION

　　

【正文】 PTS: 1 DIF: 1 REF: p. 85 | Example 3 OBJ: 1 NAT: AICPA FNMeasurement | AACSB Analytic MSC: 5 min 814 2020 Comprehensive Volume/Test Bank purchased a machine for $40,000 to be used in her business. The cost recovery allowed and allowable for the three years the machine was used are as follows: Cost Recovery Allowed Cost Recovery Allowable Year 1 $16,000 $ 8,000 Year 2 9,600 12,800 Year 3 5,760 7,680 If Tara sells the machine after three years for $15,000, how much gain should she recognize? a. $3,480. b. $6,360. c. $9,240. d. $11,480. e. None of the above. ANS: D Cost $40,000 Less the greater of cost recovery allowed or allowable ($16,000 + $12,800 + $7,680) (36,480) Adjusted basis $ 3,520 The recognized gain is $11,480 ($15,000 – $3,520). PTS: 1 DIF: 1 REF: Example 2 OBJ: 1 NAT: AICPA FNMeasurement | AACSB Analytic MSC: 5 min 5. Hazel purchased a new business asset (fiveyear property) on November 30, 2020, at a cost of $100,000. This was the only asset acquired by Hazel during 2020. On January 7, 2020, Hazel placed the asset in service. She did not elect to expense any of the asset cost under 167。 179, nor did she elect straightline cost recovery. Hazel did elect not to take additional firstyear depreciation. On October 25, 2020, Hazel sold the asset. Determine the cost recovery for 2020. a. $9,600. b. $16,000. c. $26,000. d. $38,000. e. None of the above. ANS: B The asset was placed in service in 2020。 so 2020 is the second year in the cost recovery period. $100,000 ? .32 ? 1/2 = $16,000. PTS: 1 DIF: 1 REF: p. 87 | p. 88 | Table OBJ: 2 NAT: AICPA FNMeasurement | AACSB Analytic MSC: 5 min Depreciation, Cost Recovery, Amortization, and Depletion 815 Company acquires a new machine (tenyear property) on January 15, 2020, at a cost of $200,000. Tan also acquires another new machine (sevenyear property) on November 5, 2020, at a cost of $40,000. No election is made to use the straightline method. The pany does not make the 167。 179 election. Tan did elect not to take additional firstyear depreciation. Determine the total deductions in calculating taxable ine related to the machines for 2020. a. $24,000. b. $25,716. c. $102,000. d. $132,858. e. None of the above. ANS: B The regular MACRS is calculated as follows: 10year property ($200,000 ? .10) $20,000 7year property ($40,000 ? .1429) 5,716 Total regular MACRS $25,716 PTS: 1 DIF: 1 REF: p. 85 to 88 | Table OBJ: 2 NAT: AICPA FNMeasurement | AACSB Analytic MSC: 5 min 7. James purchased a new business asset (threeyear property) on July 23, 2020, at a cost of $50,000. He did not elect to expense any of the asset under 167。 179, nor did he elect straightline cost recovery. Determine the cost recovery deduction for 2020. a. $8,333. b. $16,665. c. $33,333. d. $41,665. e. None of the above. ANS: C Additional firstyear depreciation is $25,000 ($50,000 ? 50%). Regular MACRS is $8,333 ($25,000 ? .3333). So the total cost recovery deduction is $33,333 ($25,000 + $8,333). PTS: 1 DIF: 1 REF: p. 85 to 89 | Table OBJ: 2 NAT: AICPA FNMeasurement | AACSB Analytic MSC: 5 min 8. Alice purchased office furniture on September 20, 2020, for $100,000. On October 10, she purchased business puters for $80,000. Alice did not elect to expense any of the assets under 167。 179, nor did she elect straightline cost recovery. Alice does elect not to take additional firstyear depreciation. Determine the cost recovery deduction for the business assets for 2020. a. $6,426. b. $14,710. c. $25,722. d. $30,290. e. None of the above. 816 2020 Comprehensive Volume/Test Bank ANS: B The midquarter convention applies. Regular MACRS Furniture (sevenyear property) $100,000 ? .1071 $10,710 Computers (fiveyear property) $80,000 ? .05 4,000 Total cost recovery $14,710 PTS: 1 DIF: 1 REF: p. 85 to 89 | Table OBJ: 2 NAT: AICPA FNMeasurement | AACSB Analytic MSC: 5 min 9. Barry purchased a used business asset (sevenyear property) on November 30, 2020, at a cost of $60,000. This is the only asset he purchased during the year. Barry did not elect to expense any of the asset under 167。 179, nor did he elect straightline cost recovery. Barry sold the asset on July 17, 2020. Determine the cost recovery deduction for 2020. a. $9,566. b. $9,975. c. $10,331. d. $16,530. e. None of the above. ANS: C The midquarter convention applies in this case [$60,000 ? .2755 ? $10,331]. Additional firstyear depreciation was not taken in 2020 because the business asset was used rather than being new. PTS: 1 DIF: 1 REF: p. 85 to 810 | Table OBJ: 2 NAT: AICPA FNMeasurement | AACSB Analytic MSC: 5 min 10. Bonnie purchased a new business asset (fiveyear property) on March 10, 2020, at a cost of $20,000. She also purchased a new business asset (sevenyear property) on November 20, 2020, at a cost of $13,000. Bonnie did not elect to expense either of the assets under 167。 179, nor did she elect straightline cost recovery. Determine the cost recovery deduction for 2020 for these assets. a. $5,858. b. $7,464. c. $9,586. d. $19,429. e. None of the above. ANS: D The halfyear convention applies in this case. Fiveyear property: Additional firstyear depreciation ($20,000 ? 50%) $10,000 Regular MACRS ($10,000 ? .20) 2,000 Depreciation, Cost Recovery, Amortization, and Depletion 817 Sevenyear property: Additional firstyear depreciation ($13,000 ? 50%) 6,500 Regular MACRS ($6,500 ? .1429) 929 Total cost recovery $19,429 PTS: 1 DIF: 1 REF: p. 85 to 810 | Table OBJ: 2 NAT: AICPA FNMeasurement | AACSB Analytic MSC: 5 min 11.