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MASTERING DEPRECIATION FINAL EXAMINATION
2025|REAL 50 QUESTIONS AND ANSWERS|GRADED
A+
Under both gaap and tax depreciation, an asset cannot be depreciated until it has been.. Acquired and placed in service. Companies whose financial statements are to be audited or reviewed by a cpa... Can use tax depreciation for their financial statements if the difference between the amounts computed under gaap and tax rules is not material. If a calendar-year company purchases over $2,620,000 of equipment during 2021, not including buildings, the maximum section 179 deduction of 1,050,000 is... Reduced dollar for dollar by the amount of equipment purchased above $2,620,000. To calculate depreciation using gaap rules, you must determine an asset's... Acquisition cost, estimated life, residual value and the depreciation method to be used. An asset's original cost includes...
The invoice price, sales tax and transportation and installation costs. Regardless of the gaap depreciation method selected... All of the above On august 1 of the current year, a company with a december 31 year-end buys a nonresidential building for $600,000, which includes land that costs 100,000. Under macrs, depreciation for this year will be... $4, For the building in question 7, depreciation in the 12th year will be... $12, When macrs, table 1 depreciation for an auto or light suv, pickup or van is in excess of annual irs limits the excess depreciation... May be taken by extending the macrs recovery period for as many years as are needed to depreciate the cost basis. During 2021, your firm acquires a 5,000-lb. Suv for $30,000 and a 6,200-lb. Suv for $35,000. How much of a section 179 deduction will your firm take on each vehicle in 2021? $0 and $26,
Under gaap, annual depreciation for a building can be allocated... Entirely to depreciation expense, entirely to inventory- work-in-process oh or partly to both, depending on how the building is used. To depreciate an asset under the double-declining balance method multiply.. The depreciation rate by each year's beginning book value Under straight-line depreciation, the annual depreciation rate is computed by... Either a or b Under sum-of-the-years'-digits depreciation... The depreciation rate changes each year. For assets acquired during the year, the sum-of-the-years'-digits method requires that the same depreciation rate be used... For 12 consecutive months, even if that results in the same rate being used in two different calendar years.
Company records show that an employee provided with a company car drove it 80% for business and 20% for personal use. The company reports the personal use as income on the employee's w-2. As a result... The company can depreciate 100% of the car's cost basis. On which of the following assets can a company take a sec 179 deduction? A computer On august 10, 2018, a calendar-year company purchases a new machine (7-year property) with cost basis of $530,000. Under macrs, what is the combined first- year sec. 179 deduction, 100% bonus, and depreciation (rounded) for the machine? $517, Under macrs, a sole proprietor who uses her own car 20% for personal purposes and 80% for business in her unincorporated company... Can depreciate 80% of the car's cost basis A company pays $30,000 for two machines. Machine a is appraised at a fair market value of $24,000 and machine b at a fair market value of $8,000. The cost of machine b is recorded for book purposes at $7,
On january 2, 20x8, a company purchases a machine for $11,000 and estimates that it will have a 10-year life and a residual value of $1,000. It is depreciating the machine for book purposes under the straight-line method. How is depreciation recorded for a manufacturer using the machine 70% for the production of inventory? Inventory - work-in-process oh -- 700 Depreciation expense ------------- 300 ------accumulated depreciation - machine 1, On september 2, 2021, a calendar-year company purchases a used machine (5-year property) for $510,000. The company takes $500,000 of sec. 179 but elects out of 100% bonus depreciation. What is the maximum tax deduction for the machine in 2021? $502, On september 2, 2021, a calendar-year company purchases a used machine (5-year property) for $510,000. The company takes $500,000 of sec. 179 but elects out of 100% bonus depreciation. What is the maximum tax deduction for the machine in 2022? $3,
On september 2, 2021, a calendar-year company purchases a used machine (5-year property) for $510,000. The company takes $500,000 of sec. 179 but elects out of 100% bonus depreciation. What is the maximum tax deduction for the machine in 2026 (year 6)? $ On october 20 of the current year, a company with a december 31 year-end purchases a factory for $150,000, which includes $50,000 for the land. What is first-year depreciation for this asset under macrs? $ Which of the following is not subject to annual irs depreciation limits? A. An unmodified company van weighing 5,000 lbsb. B. An unmodified company van weighing 7,500 lbsc. C. A company car used by the company's sales manager. D. A company car used by the company's president B. An unmodified company van weighing 7,500 lbs
A company that uses a calendar year purchases an asset with a historical cost of $250,000, a residual value of $5,000, and an estimated life of 5 years. If the asset is acquired on january 1, and is depreciated under the double-declining balance method, second-year depreciation is... $60, A company that uses a calendar year purchases an asset with a historical cost of $250,000, a residual value of $5,000, and an estimated life of 5 years. If the asset is acquired on january 1, and is depreciated under the sum-of-the- years'-digits method, the denominator of the depreciation rate would be... 15 A company that uses a calendar year purchases an asset with a historical cost of $250,000, a residual value of $5,000, and an estimated life of 5 years. If the asset is acquired on january 1, and is depreciated under the sum-of-the- years'-digits method, first-year depreciation (rounded) would be... $81,
A company that uses a calendar year purchases an asset with a historical cost of $250,000, a residual value of $5,000, and an estimated life of 5 years. Under any gaap depreciation method, the maximum depreciation permitted over the asset's life is... $245, A company purchases a machine that has an original cost of $11,500, transportation costs of $500, installation charges of $1,500, an estimated life of 4 years or 20,484 hours, and a residual value of $800. You are depreciating the machine for book purposes. What is the depreciation rate (rounded) under the units of production method? $0.62 per hour A company purchases a machine that has an original cost of $11,500, transportation costs of $500, installation charges of $1,500, an estimated life of 4 years or 20,484 hours, and a residual value of $800. You are depreciating the machine for book purposes. If the machine is acquired on august 1 and is used 2,500 hours during the year, depreciation for the year under the units of production method is... $1,
If the company uses units of production depreciation and the equipment produces 75,000 units in 20x1 and 150,000 units in 20x2, then at the end of the second year, total accumulated depreciation will be... $22, On april 1, 20x1, a company that uses a calendar year purchases equipment with an acquisition cost of $85,000 that it estimates will produce 800,000 units over its 8 - year life and have a residual value of $5,000. You are depreciating the asset for book purposes. If the company uses double-declining balance depreciation, its 20x1 depreciation (rounded) will be... $15, On april 1, 20x1, a company that uses a calendar year purchases equipment with an acquisition cost of $85,000 that it estimates will produce 800,000 units over its 8 - year life and have a residual value of $5,000. You are depreciating the asset for book purposes. Under double-declining balance depreciation, the equipment book value (rounded) at the end 20x2 will be... $51,
On april 1, 20x1, a company that uses a calendar year purchases equipment with an acquisition cost of $85,000 that it estimates will produce 800,000 units over its 8 - year life and have a residual value of $5,000. You are depreciating the asset for book purposes. If the company uses the sum-of-the-years'-digits method, the 20x2 depreciation will be (rounded)... $16,
