Your company has purchased a large new ruck ractor or over-the-road use asset ca

Question

Your company has purchased a large new ruck ractor or over-the-road use asset cass 00 6·lt has a cost bass o $1 $194,000. Its MV at the end of six years is estimated as $39,000. Assume it will be depreciated under the GDS: a. What is the cumulative depreciation through the end of year two? b. What is the MACRS depreciation in the second year? c. What is the BV at the end of year one? with addit ona options costing ST 0 the cost bass fr depreaation our posess Click the icon to view the partial listing of depreciable assets used in business. Click the icon to view the GDS Recovery Rates (W The cumulative depreciation through the end of yea two is S(Round to the nearest dollar) b. The MACRS depreciation in the second year is $ (Round to the nearest dollar.) c. The BV at the end of year one is $ . (Round to the nearest dollar.)

Explanation / Answer

Asset class(00.26)

Life = 3 years

1st year depreciation= 0.3333× 194000= 64660.20

2nd year depreciation= 0.4445×(194000-64660.20)= 57491.54

a. Cumulative depreciation through the end of year 2= 64660.20+ 57491.54= $122151.74

b. MACRS depreciation in 2nd year= $ 57491.54

c. Book Value at the end of year 1= 194000-64660.20= $129339.80

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