Question

Carolyn purchased a new office desk on July 23, 2018, at a cost of $2,474. She did not claim the bonus depreciation deduction. Using the half-year convention, Carolyn may claim 2018 depreciation in the amount of:__________a. $237 b. $339 c. $475 d. $791

Answer 1

Answer:

Depreciation under half-year convention is= 309.25

Explanation:

(Important Note: The information provided in the question are incomplete. In order to calculate depreciation expense using the half year convention we must have useful life of the new office desk and residual value, if any! Therefore we base the solution of this question by using some assumptions.)

Assuming that the useful life of the new office desk is 4 years and has no salvage value, the depreciation would be as follows:

Depreciation expense = $2474÷ 4

Depreciation expense = $618.5

But this is yearly expense and under the half-year convention it's assumed that the new office desk is being used for one-half or it's first year therefore the half year depreciation expense will be calculated and the remaining half of depreciation will be expensed out in the final year of depreciation.

So depreciation under half-year convention is= 618.5× 6÷ 12

depreciation under half-year convention is= 309.25