Cruz Copy Shop Purchases a New Copy Machine in July

question 13

Multiple Choice

Cruz Copy Shop purchases a new copy machine in July 2017 for $30,000.No other depreciable assets are placed in service in 2017.Since Cruz 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 Cruz Copy Shop's MACRS straight-line depreciation for 2017?

• A)$1,500
• B)$2,143
• C)$3,000
• D)$3,213
• E)$4,500

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Definitions:

Effective Interest Amortization

Effective Interest Amortization is a method of calculating the amortization of a bond's premium or discount, taking into account the time value of money.

Interest Accrual

The accumulation of interest on a loan or investment over time, which has been earned but not yet paid.

Common Stock Warrants

Certificates granting the holder the right to purchase common stock at a specified price within a certain period of time.