Lax, LLC Purchased Only One Asset During the Current Year

question 101

Multiple Choice

Lax, LLC purchased only one asset during the current year. Lax placed in service computer equipment (5-year property) on August 26 with a basis of $20,000. Calculate the maximum depreciation expense for the current year (ignoring §179 and bonus depreciation) :

• A) $2,000
• B) $2,858
• C) $3,000
• D) $4,000
• E) None of these

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Definitions:

Monotonous

Lacking in variety and interest; tediously unvarying.

Attributonial Bias

A cognitive bias that affects the way we determine who or what is responsible for an event or action, often leading to error in judgment.

Cognitive Dissonance

A psychological discomfort experienced when holding contradictory beliefs or values, or when behavior and beliefs do not align, often leading to a change in beliefs or behaviors to reduce the dissonance.

Small Amount

A quantity that is less than average or nominal, often referring to a minimal or insignificant portion of something.