Sairra LLC Purchased Only One Asset During the Current Year

question 127

Multiple Choice

Sairra LLC purchased only one asset during the current year (a full 12-month tax year) . On April 16 Sairra placed in service furniture (seven-year property) with a basis of $25,000. Calculate the maximum depreciation expense for the current year (ignoring §179 and bonus depreciation) . (Use MACRS Table 1.) (Round final answer to the nearest whole number.)

• A)$1,786
• B)$3,573
• C)$4,463
• D)$5,000
• E)None of the choices are correct.

---

Definitions:

Actual Bad Debts

Debts that have been specifically identified as uncollectible, following efforts to collect and evidence that repayment is unlikely.

Accounts Receivable

Money owed to a business by its clients or customers for goods or services that have been delivered or used but not yet paid for.

Sales

The total revenue earned from the sale of goods or services by a company during a specified period.

Net Price Method

An accounting method that records purchases at the net cost, after deducting any purchase discounts, rather than recording them at the gross cost.