Question

vaughn Corporation purchased an asset at a cost of $56,250 on March 1, 2020. The asset has a useful life of 8 years and a salvage value of $4,500. For tax purposes, the MACRS class life is 5 years.

Recovery Year		3-year   (200% DB)		5-year (200% DB)		7-year (200% DB)		10-year (200% DB)		15-year (150% DB)		20-year (150% DB)
1		33.33		20.00		14.29		10.00		5.00		3.750
2		44.45		32.00		24.29		18.00		9.50		7.219
3		14.81*		19.20		17.49		14.40		8.55		6.677
4		7.41		11.52*		12.49		11.52		7.70		6.177
5				11.52		8.93*		9.22		6.93		5.713
6				5.76		8.92		7.37		6.23		5.285
7						8.93		6.55*		5.90*		4.888
8						4.46		6.55		5.90		4.522
9								6.56		5.91		4.462*
10								6.55		5.90		4.461
11								3.28		5.91		4.462
12										5.90		4.461
13										5.91		4.462
14										5.90		4.461
15										5.91		4.462
16										2.95		4.461
17												4.462
18												4.461
19												4.462
20												4.461
21												2.231

Compute tax depreciation for each year 2020–2025. (Round answers to 0 decimal places, e.g. 45,892.)

Answer 1

under MARCS depreciation method salvage value has no impact on depreciation amount.

We have to use 5 year depreciation rate means depreciation for 6 year from 2020 to 2025.

below is the computation -

Recovery	Depreciation rate	Depreciation = 56250*depreciation rate
Year
2020	20%	11,250
2021	32%	18,000
2022	19.20%	10,800
2023	11.52%	6,480
2024	11.52%	6,480
2025	5.76%	3,240
Total		56,250