Suvi,IncPurchased Two Assets During the Current Year (A Full 12-Month

question 19

Multiple Choice

Suvi,Inc.purchased two assets during the current year (a full 12-month tax year) .Suvi placed in service computer equipment (5-year property) on August 10 with a basis of $20,000 and machinery (7-year property) on November 18 with a basis of $10,000.Calculate the maximum depreciation expense (ignoring §179 and bonus depreciation) .(Use MACRS Table 1 in the text) (Round final answer to the nearest whole number)

• A) $857.
• B) $3,357.
• C) $5,429.
• D) $6,000.
• E) None of the choices are correct.

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Definitions:

State and Local Taxes

Taxes imposed by individual states and localities, which can include income, sales, property, and other forms of taxes.

Federal Taxation

The system by which the federal government of a country levies taxes on individuals and corporations to fund its operations.

Inelastic

Describes a situation where the demand or supply of a good or service is relatively unresponsive to changes in price.

Excise Tax

A tax levied on specific goods, services, or transactions, often included in the price of the product, such as alcohol, tobacco, and gasoline.