# Dlw corporation acquired and placed in service the following assets during the year:

DLW Corporation acquired and placed in service the following
assets during the year:

 Date Cost Asset Acquired Basis Computer equipment 3/11 $18,000 Furniture 3/7 23,500 Commercial building 9/15 317,000 Assuming DLW does not elect §179 expensing or bonus depreciation, answer the following questions: (Use MACRS Table 1, Table 2, Table 3, Table 4 and Table 5.) (Do not round intermediate calculations. Round your final answers to the nearest whole dollar amount.) A.)What is DLW's year 1 cost recovery for each asset?  Asset Yr1 Recovery Cost Computer Equipment Furniture Commercial Building Total B.) What is DLW's year 3 cost recovery for each asset if DLW sells all of these assets on 2/24 of year 3?  Assets Yr 3 Recovery Costs Computer Equipment Furniture Commercial Building Total ## Answer Solution: A). Calculation of DLW's year 1 cost recovery for each asset: Under half-year convention for personal property, calculated as follows:  Asset Purchases date Quarter Recovery period Original basis (1) Rate (2) Depreciation (1) * (2) Computer equipment March,11th 1st quarter 5 years$18,000 20.00% $3,600 Furniture March, 7th 1st quarter 7 years$23,500 14.29% $3,358 Commercial Building September, 15th 3rd quarter 39 years$317,000 0.749% $2,374 Total$9,332

Therefore, the year 1 cost recovery is for each
asset is $9,332 B) Calculation of DLW's year 3 cost recovery for each asset if DLW sells all of these assets on 2/24 of year 3:  Asset Original basis Recovery period Rate Portion of year Depreciation and Expense Computer equipment$18,000 5 years 19.20% 50.00% $1,728 Furniture$23,500 7 years 17.49% 50.00% $2,055 Commercial building$317,000 39 years 2.564% 12.5% $1,015 Total$4,798

Therefore, the year 3 cost
recovery is for each asset is \$4,798