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19 November, 03:01

Overland purchased $387,950 of fixed assets that are classified as three-year property for MACRS. The MACRS rates are. 3333,.4445,.1481, and. 0741 for Years 1 to 4, respectively. What is the amount of the depreciation expense in Year 3 assuming no bonus depreciation is taken?

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  1. 19 November, 03:07
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    Answer: $57,455.395

    Explanation:

    Given that,

    Fixed assets purchased = $387,950

    MACRS rates are as follows:

    Year 1 = 0.3333

    Year 2 = 0.4445

    Year 3 = 0.1481

    Year 4 = 0.0741

    Depreciation Expense in Year 3:

    = Initial Value or Purchase Price of equipment * MACRS rate for Year 3

    = $387,950 * 0.1481

    = $57,455.395
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