On June 1, 2018, Cork Oak Corporation purchased a passenger automobile for 100 percent use in its business. The auto, with a cost basis of $22,000, has a 5-year recovery period ... How much depreciation should be taken for 2018, assuming Cork Oak Corporation uses the accelerated depreciation method under MACRS but does not choose to make the election to expense or take bonus depreciation?

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3 April, 01:37

On June 1, 2018, Cork Oak Corporation purchased a passenger automobile for 100 percent use in its business. The auto, with a cost basis of $22,000, has a 5-year recovery period ... How much depreciation should be taken for 2018, assuming Cork Oak Corporation uses the accelerated depreciation method under MACRS but does not choose to make the election to expense or take bonus depreciation?

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Carlos Cochran · Answer 1

=$ 4400

Explanation:

Under the Macrs depreciation schedule, motor vehicles as assets have a useful life of 5 years. In the first year, the deprecation rate id 20%, followed by 32% in the second year.

For cork oak corporation: the value of the motor vehicle is 22,000

Date of purchase 2018, years in depreciation: 1

Depreciation: = 20/100 x 22 000

=$ 4400