Question

Ethan's Eggroll House, a calendar year corporation, purchased a new computer and printer in January for $1,500. In February, the business purchased a new oven for $1,200. No other assets were purchased during the year. How much depreciation will be taken on these items in the current year if the taxpayer does NOT elect to use Section 179 and does NOT use bonus depreciation

Answer 1

Answer:

$300 computer; $171 oven

Explanation:

Ethan's Eggroll House

Life of computer is 5 years and the rate used is 20%

Life of oven is 7 years and the rate used is 14.29%

Depreciation

Computer

= $1500 x 20%

= $300

Oven

= $1200 x 14.29%

= $171

Therefore the amount of depreciation that will be taken on these items in the current year if the taxpayer does NOT elect to use Section 179 and does NOT use bonus depreciation is : $300 computer; $171 oven