ACCT 308 QUIZ 3 STUDY SET UPDATED ACTUAL
QUESTIONS AND CORRECT ANSWERS
Question:
Diana acquires, for $65,000, and places in service a 5-
year class asset on December 19, 2024. It is the only asset
that Diana acquires during 2024. Diana does not elect
immediate expensing under § 179. She elects additional
first-year deprecation.
Answer:
$40,300
Question:
McKenzie placed in service qualifying equipment (7-year
MACRS class) for his business that cost $212,000 in 2024.
The taxable income of the business for the year is $5,600
before consideration of any § 179 deduction.
a. Calculate McKenzie's § 179 expense deduction for
2024 and any carryover to 2025.
§ 179 expense deduction for 2024:
§ 179 carryover to 2025:
Answer:
5,600
206,400
Question:
McKenzie placed in service qualifying equipment (7-year
MACRS class) for his business that cost $212,000 in 2024.
The taxable income of the business for the year is $5,600
before consideration of any § 179 deduction.
b. How would your answer change if McKenzie decided
to use additional first-year (bonus) depreciation on the
equipment instead of using § 179 expensing
Additional first-year depreciation for 2024: $
MACRS cost recovery for 2024: $
Total cost recovery for 2024: $
Answer:
127,200
12,118
139,318
Question:
Naya purchased and placed in service a new computer
(5-year MACRS property) on June 1, 2024, for $4,000.
Naya could use the computer 100% of the time in her
business, or she could allow her family to use the
, computer as well. Naya estimates that if her family uses
the computer, the business use will be 45% and the
personal use will be 55%.
Determine the tax cost to Naya, in the year of acquisition,
of allowing her family to use the computer. Assume that
Naya would not elect § 179 immediate expensing and that
her marginal income tax rate is 32%. She does not claim
any available additional first-year depreciation.
a. What is the amount of the depreciation deduction if the
computer is used 100% for business?
Answer:
800
($4,000.2100%)
Question:
Naya purchased and placed in service a new computer
(5-year MACRS property) on June 1, 2024, for $4,000.
Naya could use the computer 100% of the time in her
business, or she could allow her family to use the
computer as well. Naya estimates that if her family uses
the computer, the business use will be 45% and the
personal use will be 55%.
Determine the tax cost to Naya, in the year of acquisition,
of allowing her family to use the computer. Assume that
Naya would not elect § 179 immediate expensing and that
her marginal income tax rate is 32%. She does not claim
any available additional first-year depreciation.
b. If Naya allows 55% personal use of the computer by
her family, then the amount of the depreciation deduction
is $
Answer:
360
($4,000 .245%)
Question:
Naya purchased and placed in service a new computer
(5-year MACRS property) on June 1, 2024, for $4,000.
Naya could use the computer 100% of the time in her
business, or she could allow her family to use the
computer as well. Naya estimates that if her family uses
the computer, the business use will be 45% and the
personal use will be 55%.
Determine the tax cost to Naya, in the year of acquisition,
of allowing her family to use the computer. Assume that
Naya would not elect § 179 immediate expensing and that
her marginal income tax rate is 32%. She does not claim
any available additional first-year depreciation.
QUESTIONS AND CORRECT ANSWERS
Question:
Diana acquires, for $65,000, and places in service a 5-
year class asset on December 19, 2024. It is the only asset
that Diana acquires during 2024. Diana does not elect
immediate expensing under § 179. She elects additional
first-year deprecation.
Answer:
$40,300
Question:
McKenzie placed in service qualifying equipment (7-year
MACRS class) for his business that cost $212,000 in 2024.
The taxable income of the business for the year is $5,600
before consideration of any § 179 deduction.
a. Calculate McKenzie's § 179 expense deduction for
2024 and any carryover to 2025.
§ 179 expense deduction for 2024:
§ 179 carryover to 2025:
Answer:
5,600
206,400
Question:
McKenzie placed in service qualifying equipment (7-year
MACRS class) for his business that cost $212,000 in 2024.
The taxable income of the business for the year is $5,600
before consideration of any § 179 deduction.
b. How would your answer change if McKenzie decided
to use additional first-year (bonus) depreciation on the
equipment instead of using § 179 expensing
Additional first-year depreciation for 2024: $
MACRS cost recovery for 2024: $
Total cost recovery for 2024: $
Answer:
127,200
12,118
139,318
Question:
Naya purchased and placed in service a new computer
(5-year MACRS property) on June 1, 2024, for $4,000.
Naya could use the computer 100% of the time in her
business, or she could allow her family to use the
, computer as well. Naya estimates that if her family uses
the computer, the business use will be 45% and the
personal use will be 55%.
Determine the tax cost to Naya, in the year of acquisition,
of allowing her family to use the computer. Assume that
Naya would not elect § 179 immediate expensing and that
her marginal income tax rate is 32%. She does not claim
any available additional first-year depreciation.
a. What is the amount of the depreciation deduction if the
computer is used 100% for business?
Answer:
800
($4,000.2100%)
Question:
Naya purchased and placed in service a new computer
(5-year MACRS property) on June 1, 2024, for $4,000.
Naya could use the computer 100% of the time in her
business, or she could allow her family to use the
computer as well. Naya estimates that if her family uses
the computer, the business use will be 45% and the
personal use will be 55%.
Determine the tax cost to Naya, in the year of acquisition,
of allowing her family to use the computer. Assume that
Naya would not elect § 179 immediate expensing and that
her marginal income tax rate is 32%. She does not claim
any available additional first-year depreciation.
b. If Naya allows 55% personal use of the computer by
her family, then the amount of the depreciation deduction
is $
Answer:
360
($4,000 .245%)
Question:
Naya purchased and placed in service a new computer
(5-year MACRS property) on June 1, 2024, for $4,000.
Naya could use the computer 100% of the time in her
business, or she could allow her family to use the
computer as well. Naya estimates that if her family uses
the computer, the business use will be 45% and the
personal use will be 55%.
Determine the tax cost to Naya, in the year of acquisition,
of allowing her family to use the computer. Assume that
Naya would not elect § 179 immediate expensing and that
her marginal income tax rate is 32%. She does not claim
any available additional first-year depreciation.
