Question

Michael purchased a new office computer system on January 23, 2018, at a cost of $3,791. He does not want to claim bonus depreciation. Using the half-year convention, the amount Michael may claim for depreciation in 2018 is __________.

(A) $316
(B) $542
(C) $663
(D) $758

Answer 1

Answer:

Michael claim for depreciation is  = $ 758.2

Explanation:

Given data:

cost of computer is $3791

As computer come under the category of 5 year property hence depreciation rate is considered to be 20% of original value under half year convention

Michael claim for depreciation is calculated as

= computer cost × rate of depreciation

= $3791 × 20%

= 3791 × 0.20

= $ 758.2