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cpalena
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Joined: 23 Jan 2008
Location: United States
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Posts: 26

Posted: 25 Aug 2008 at 14:03 \| IP Logged

Hey, can anyone help me with the following question:

A company bought on November 1, a new truck.

the cost is 65,000

life is 5 years

No section 179 elected in the year

What is the depreciation expense without using the MARCS table?

The answer is $2,438 but i would like to know how to calculate without using the MARCS table.

cpalena
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Joined: 23 Jan 2008
Location: United States
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Posted: 26 Aug 2008 at 08:43 \| IP Logged

Anyone help!!!!!!!!!!!!!!!!

snowing1981
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Joined: 19 Nov 2007
Location: United States
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Posts: 23

Posted: 26 Aug 2008 at 10:11 \| IP Logged

are you sure the answer is right? I looked up the table, Mid quarter convention placed in service during fourth quarter with 200 DB, the rate is 5%,

Manual cal should be 1/5*2=40%, 40% * 12.5% = 0.05, which is also 5%.

Edited by snowing1981 on 26 Aug 2008 at 10:13

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shinggy
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Joined: 24 Nov 2007
Location: Hong Kong
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Posted: 26 Aug 2008 at 11:44 \| IP Logged

Do you have a Macrs table with you? I am assuming you do in answering this question

It's easy, as this assets is placed in use in the LAST quarter of the year, therefore you need to mid-quarter rule and to pick a percentage from the fourth quarter table

Look up the table of fourth quarter, 5 years in Year 1, the percentage is 3.75%, if you mutiply 65,000*3.75%, it is $2,437.5 which is appromixately $2,438

shinggy
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Joined: 24 Nov 2007
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Posted: 26 Aug 2008 at 11:46 \| IP Logged

Mine is Marcs table (4th quarter convention, 150% declining bal method)

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