Question

The (1)-(2) convention is used for all assets purchased during the year when more than (3)% of the tangible personal property purchased is placed in service during the fourth quarter of the year.

a. Mid-quarter; Mid-year; 40%
b. Mid-year; Mid-quarter; 20%
c. Half-year; Mid-quarter; 30%
d. Mid-quarter; Half-year; 50%

Answer 1

The correct answer is option d. Mid-quarter; Half-year; 50%.

Step-by-step explanation:

The correct answer to the question is option d. Mid-quarter; Half-year; 50%.

The (1)-(2) convention is a method used for determining depreciation expense for assets purchased in a given year. The Mid-quarter convention is used when more than 40% of the total cost of all tangible personal property is placed in service during the fourth quarter of the year. The Half-year convention is used for assets placed in service in the first half of the year. Therefore, the correct combination is Mid-quarter and Half-year, with a threshold of 50%.