00:01
In this question to calculate the depreciation schedule using 3 -year modified accelerated cost recovery system that is markers method, we will first need the markers depreciation rate, we can write here depreciation rate for a 3 -year property.
00:32
So the gds we can write here, gds that is general depreciation system rates for 3 -year property will be we can write here for first year is that is 33 .33 percent, for second year it will be 44 .45 percent, for third year it will be 14 .81 percent and for fourth year it will be 7 .41 percent.
01:14
So based on this we can say that a leaser has an initial cost of $150 ,000 and a salvage value of $50 ,000.
01:30
So the depreciation basis is we can write here it will be $100 ,000 into 1500 or 150 ,000 minus 50 ,000 that gives the value for depreciation basis.
01:53
Now we will calculate the depreciation expense for each year such as first year that will be $100 ,000 into 33 .33 percent that gives the value equals to $33 ,330.
02:17
Further for second year we can calculate this will be equals to such as $100 ,000 into 44 .45 percent that will be equals to $44 ,450.
02:36
For third year we can write $100 ,000 into 14 .81 percent this will give value equals to $14 ,810 and for fourth year we can write here fourth year will be such as $100 ,000 into we can write here 7 .41 percent that gives value $7 ,410...