Way Corporation disposed of the following tangible personal

Way Corporation disposed of the following tangible personal property assets in the current year. Date Date Original Asset Acquired Sold Convention Basis Furniture (7-year) 5/12/13 7/15/17 HY $ 55,000 Machinery (7-year) 3/23/14 3/15/17 MQ 72,000 Delivery truck* (5-year) 9/17/15 3/13/17 HY 20,000 Machinery (7-year) 10/11/16 8/11/17 MQ 270,000 Computer (5-year) 10/11/17 12/15/17 HY 80,000 *Used 100 percent for business.

Assume that the delivery truck is not a luxury auto. Calculate Way Corporation’s 2017 depreciation expense

(ignore §179 expense and bonus depreciation). Exhibit 10-6 (Use MACRS Table 1 and Table 2.) (Round your intermediate dollar calculations and final answer to the nearest whole dollar amount.)

TABLE 1 MACRS Half-Year Convention Depreciation Rate for Recovery Period ear | 3-year | 5-year | 7-year | 10-year | 15-year | 20-year 33.33 4.45 14.81 7.41 20.00 32.00 19.20 11.52 11.52 5.6 123456789ong 14.29 24.49 17.49 12.49 8.93 8.92 8.93 4.46 |10.00 18.00 14.40 11.52 9.22 7.37 6.55 6.55 6.8 6.55 3.28 W 5.00 9.50 8.55 7.70 6.93 6.23 5.90 5.90 5.91 5.90 5.91 5.90 5.91 5.90 5.91 2.95 3.750 7.219 6.677 6.177 5.713 5.285 4.888 4.522 4.462 4.461 4.462 4.461 4.462 4.461 4.462 4.461 4.462 4.461 4.462 4.461 2.231 14 15 Ba

Solution

Asset Basis Convention MACRS % Portion of full year depreciation allowed in case of disposal of asset Depreciation 1 2 3 4 1*3*4 Furniture 55000 HY 8.93% 50% 2456 Machinery 72000 MQ 10.93% 12.50% 984 Disposed in 1st quarter Delivery truck 20000 HY 19.20% 50% 1920 Machinery 270000 MQ 27.55% 62.50% 46491 Disposed in 3rd quarter Computer 80000 HY 0%* 50% 0 Total 51850 * No depreciation for asset acquired and sold in the same year