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On July 15, 2018, H

question 43

Essay

On July 15, 2018, H.P.purchases a personal computer for his home.The computer cost $4,000.H.P.uses the computer 60 percent of the time in his business, 15 percent of the time for managing his investments and the remaining 25 percent of the time for various personal uses.Calculate H.P.'s maximum depreciation deduction for 2018 for the computer, assuming he does not make the election to expense or take bonus depreciation.


Definitions:

Fixed Asset Investment

The acquisition of long-term physical assets by a company to be used in its operations for generating income.

Depreciated

A decrease in the value of an asset over time, often due to wear and tear or obsolescence, recognized in accounting to allocate the cost of an asset over its useful life.

Salvage Value

The estimated residual value of an asset after it has completed its useful life and cannot be used for production.

Operating Cash Flow

Refers to the cash generated from a company's normal business operations, indicating its ability to generate sufficient revenue to cover its operational costs and fund its operations.

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