Watson Company Purchases Used Equipment (5-Year MACRS Property) for $1,100,000

Multiple Choice

Watson Company purchases used equipment (5-year MACRS property) for $1,100,000 on July 8, 2018. Watson does not want to use bonus depreciation. What is Watson' maximum allowable cost recovery deduction for 2018 on the equipment if this is the only purchase of equipment for 2018?

A) $940,000
B) $1,000,000
C) $1,020,000
D) $1,040,000
E) $1,100,000