REG_Depreciation SIM

  • Creator
    Topic
  • February 7, 2018 at 4:34 pm #1709277
    j3cpa
    Participant

    This is a little bit confusing for me although I thought it was really easy! I’m doing the REG sample test on the AICPA website.

    Vehicle purchased in Y1 for $20,000.

    Y2 depreciation should have been 32% according to the MACRS chart. But the correct answer they want is $2,400.

    How did they get this $2,400 as a depreciation expense? Does anybody know?

    thank you

    Study Material:
    GLEIM
    BEC - FEB/2012
    AUD - FEB/2012
    FAR - JULY/2012
    REG - JULY/2012

Viewing 7 replies - 1 through 7 (of 7 total)
  • Author
    Replies
  • February 7, 2018 at 4:46 pm #1709280
    Victor
    Participant

    I think you have to post entire question here

    February 7, 2018 at 4:47 pm #1709283
    jenpen
    Participant

    Google it or search on here – I found the answer floating around the forum last year because I couldn't figure it out either. There's a great explanation to help.

    AUD - 56 - 68 - 61 - 9/8/16
    REG - 75
    FAR - 7/15/16
    BEC - TBD

    Wiley CPAexcel and NINJA 10 Point Combo

    February 7, 2018 at 5:15 pm #1709308
    j3cpa
    Participant

    Jennifer: thank you for your suggestion.

    1/2 year convention was used and my original question didn't pose a pretext of 75% business use.

    1/2 year convention applies to both first year and the year asset disposed!

    so for Y2 .. 32% x 1/2 x $20,000 x 75% business use was how they got the answer.

    Study Material:
    GLEIM
    BEC - FEB/2012
    AUD - FEB/2012
    FAR - JULY/2012
    REG - JULY/2012

    February 7, 2018 at 5:32 pm #1709314
    aaronmo
    Participant

    I don't remember MACRS being tested in REG at all…at least not in a “memorize the MACRS tables” way. I sort of remember that you had to sort of know what it was…but not to the point where you had to know how to do MACRS depreciation.

    Warning…it was a year and a half ago…I reserve the right to be totally wrong.

    February 7, 2018 at 7:10 pm #1709343
    alloverit
    Participant

    j3cpa has it right. It's half-year convention so the starting point is $3,200. But they only get 75% of that…the business portion.

    I remember that question. There is another part of that SIM that asks for mileage expense. I think the answer is $9,750 because they only get 75% of the mileage too.

    February 8, 2018 at 8:42 am #1709562
    Anonymous
    Inactive

    Mystery solved, glad I passed REG without knowing the answer to those! 🙂 LOL

    February 8, 2018 at 10:16 am #1709625
    j3cpa
    Participant

    anyatver: you lucky son of a gun! =] Congrats on passing REG

    Study Material:
    GLEIM
    BEC - FEB/2012
    AUD - FEB/2012
    FAR - JULY/2012
    REG - JULY/2012

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