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An asset is purchased for $250,000. The asset is depreciated using MACRS depreci

ID: 1159285 • Letter: A

Question

An asset is purchased for $250,000. The asset is depreciated using MACRS depreciation and a five year recovery period. At the end of the fourth year of use the business changed its product mix and disposed of the asset. Find the depreciation allowed in the third year
An asset is purchased for $250,000. The asset is depreciated using MACRS depreciation and a five year recovery period. At the end of the fourth year of use the business changed its product mix and disposed of the asset. Find the depreciation allowed in the third year
An asset is purchased for $250,000. The asset is depreciated using MACRS depreciation and a five year recovery period. At the end of the fourth year of use the business changed its product mix and disposed of the asset. Find the depreciation allowed in the third year

Explanation / Answer

The depreciation allowed in the third year equals $ 48,000

Year Depreciation rate Depreciation per year 1 20.00% $50,000.00 2 32.00% $80,000.00 3 19.20% $48,000.00 4 11.52% 5 11.52% 6 5.76%

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An asset is needed for a short amount of time (3years) it cost $250.000, but its
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