A project requires $428,000 of equipment that is classified as seven-year property. What is the depreciation expense in Year 3 given the following MACRS depreciation allowances, starting with Year 1: 14.29, 24.49, 17.49, 12.49, 8.93, 8.92, 8.93, and 4.46 percent?

A) $56,038.15

B) $89,038.42

C) $74,857.20

D) $104,817.20

E) $48,447.30

Question

Business

Areli

15 March, 19:10

A project requires $428,000 of equipment that is classified as seven-year property. What is the depreciation expense in Year 3 given the following MACRS depreciation allowances, starting with Year 1: 14.29, 24.49, 17.49, 12.49, 8.93, 8.92, 8.93, and 4.46 percent?

A) $56,038.15

B) $89,038.42

C) $74,857.20

D) $104,817.20

E) $48,447.30

+2

Answers (1)

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Lassie · Answer 1

C) $74,857.20

Explanation:

The computation of the depreciation expense in year 3 is shown below:

= Required equipment amount * MACRS depreciation allowances in year 3

= $428,000 * 17.49%

= $74,857.20

Simply we multiply the equipment amount with its depreciation allowance of year 3 so that the correct amount can be computed.

All other information which is given is not relevant. Hence, ignored it