During the Year 2016, a Calendar Year Taxpayer, Marvelous Munchies

question 30

Essay

During the year 2016, a calendar year taxpayer, Marvelous Munchies, a chain of specialty food shops, purchased equipment as follows:
$$\begin{array} { l l l } \text { Date } & \text { Asset } & \text { Cost } \\\hline \text { March 3 } & \text { Refrigerators } & 600,000 \\\text { October9 } & \text { Equipment } & 2,200,000\end{array}$$ Assume the property is all 5-year property, but does not qualify for bonus depreciation. What is the maximum depreciation that may be deducted for the assets this year, 2016, assuming the alternative depreciation system is not chosen?

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Definitions:

Credit

A financial term describing the ability of a buyer to receive goods or services before payment, based on the trust that payment will be made in the future.

Stockholders' Equity

The ownership interest of shareholders in a corporation, represented by the company's assets minus its liabilities.

Services

Services involve non-tangible tasks performed for a fee, offering benefits, help, or satisfaction to customers without producing physical goods.

Account

An arrangement by which an individual or entity keeps track of their financial transactions and positions with another entity.