Question

accelerated methods of depreciation result in greater depreciation allowances than straight-line depreciation in the early years of the depreciation schedule, suppose a personal property is eligible for a three-year cost recovery period and can be depreciated using 300 percent declining balance depreciation. calculate the accelerated depreciation rate in the first year A) 10.28% B) 66.66 C)28.57% D) None of the above

Answer 1

Accelerated depreciation is adepreciation method whereby an asset loses book value at a faster rate than the traditional straight-line method. Generally, this method allows greater deductions in the earlier years of an asset and is used to minimize taxable income.

In the given case, the useful life assumed is 3 years

And 300% declining balance depreciation

First year depreciation rate comes to 1/3*300% =1 I.e., 100 percent depreciation in the very first year

The above answer is not given in the options. Hence it is D) none.