Your company has purchased a large new trucktractor for over-the-road use (asset class 00.26). It has a cost basis of $1

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Your Company Has Purchased A Large New Trucktractor For Over The Road Use Asset Class 00 26 It Has A Cost Basis Of 1 1 (204.2 KiB) Viewed 21 times

Your Company Has Purchased A Large New Trucktractor For Over The Road Use Asset Class 00 26 It Has A Cost Basis Of 1 2 (301.35 KiB) Viewed 21 times

Your company has purchased a large new trucktractor for over-the-road use (asset class 00.26). It has a cost basis of $175,000. With additional options costing $16,000, the cost basis for depreciation purposes is $191,000. Its MV at the end of five years is estimated as $36,000. 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 two? Click the icon to view the partial listing of depreciable assets used in business. Click the icon to view the GDS Recovery Rates (rk).

Asset Class 00.11 00.12 00.22 00.23 00.241 00.242 00.26 01.1 10.0 13.2 13.3 15.0 22.3 24.4 28.0 30.1 32.2 MACRS Class Lives and Recovery Periods Descriptions of Assets Office furniture and equipment Information systems, including computers Automobiles, taxis Buses Light general purpose trucks Heavy general purpose trucks Tractor units for use over the road Agriculture Mining Production of petroleum and natural gas Petroleum refining Construction Manufacture of carpets Manufacture of wood products and furniture Manufacture of chemicals and allied products Manufacture of rubber products Manufacture of cement Class Life 10 635+6+O 9 4 4 10 10 14 ܘ ܗ ܘ ܘ 9.5 14 20 Recovery Periods GDS ADS 7 5 ܗ ܗ 5 5 5 5 3 7 7 7 10 5 5 7 575 15 10 5 5 9 5 6 4 10 10 14 16 6 9 10 9.5 14 20

More Info Year 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 GDS Recovery Rates (r) for the Six Personal Property Classes Recovery Period (and Property Class) 3-yeara 0.3333 0.4445 0.1481 0.0741 5-yeara 0.2000 0.3200 0.1920 0.1152 0.1152 0.0576 7-yeara 0.1429 0.2449 0.1749 0.1249 0.0893 0.0892 0.0893 0.0446 10-yeara 0.1000 0.1800 0.1440 0.1152 0.0922 0.0737 0.0655 0.0655 0.0656 0.0655 0.0328 15-yearb 0.0500 0.0950 0.0855 0.0770 0.0693 0.0623 0.0590 0.0590 0.0591 0.0590 0.0591 0.0590 0.0591 0.0590 0.0591 0.0295 20-yearb 0.0375 0.0722 0.0668 0.0618 0.0571 0.0528 0.0489 0.0452 0.0447 0.0447 0.0446 0.0446 0.0446 0.0446 0.0446 0.0446

6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 U.11U2 0.0576 C.0030 0.0892 0.0893 0.0446 0.0022 0.0737 0.0655 0.0655 0.0656 0.0655 0.0328 0.0030 0.0623 0.0590 0.0590 0.0591 0.0590 0.0591 0.0590 0.0591 0.0590 0.0591 0.0295 0.0071 0.0528 0.0489 0.0452 0.0447 0.0447 0.0446 0.0446 0.0446 0.0446 0.0446 0.0446 0.0446 0.0446 0.0446 0.0446 0.0223 aThese rates are determined by applying the 200% DB method (with switchover to the SL method) to the recovery period with the half-year convention applied to the first and last years. Rates for each period must sum to 1.0000.