Wu Copy Shop Purchases a New Copy Machine in July

question 59

Multiple Choice

Wu Copy Shop purchases a new copy machine in July 2017 for $30,000.No other depreciable assets are placed in service in 2017.Since Wu Copy Shop expects to be in a much higher tax bracket in future years,it desires to minimize its current cost recovery amount to the fullest extent possible.What is the amount of Wu Copy Shop's ADS depreciation for 2017?

• A)$1,500
• B)$3,000
• C)$4,500
• D)$5,400
• E)$6,000

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Definitions:

Process Costing

An accounting methodology used for allocating production costs to individual units of output when products are virtually identical.

Departmental Production Report

A document that summarizes the output, efficiency, and costs associated with a particular department within a company over a specified period.

Work in Process Inventory

Inventory that includes items that are currently being produced but are not yet complete.

Conversion Costs

Expenses related to transforming raw materials into finished goods, typically including labor and manufacturing overhead.