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Euclid acquires a 7-year class asset on May 9, 2018, for $162,400. Euclid does not elect...

Euclid acquires a 7-year class asset on May 9, 2018, for $162,400. Euclid does not elect immediate expensing under § 179. He does not claim any available additional first-year depreciation.

Click here to access the depreciation table to use for this problem.

If required, round your answers to the nearest dollar.

Euclid's cost recovery deduction is $____________ for 2018 and $_____________ for 2019.

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Answer #1

Solution :

Calculation of Euclid's cost of recovery deduction for 2018 and 2019 -

cost of recovery deduction for 2018 = Asset value * Depreciation rate for the 1st year

= $1,62,400 * 14.29%(by using MACR table)

= $23,206.96

Therefore , the cost of recovery of deduction for 2018 is $23,207(Approx) .

cost of recovery deduction for 2019 = Asset value * Depreciation rate for the 2nd year

= $1,62,400 * 24.49%(by using MACR table)

= $39,771.76

Therefore , the cost of recovery of deduction for 2019 is $39,772 (Approx) .

Euclid's cost recovery deduction is $ 23,207 for 2018 and $ 39,772 for 2019.

  

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