Answer:
The total cost recovery for 2017 is $38,838.75 and The total recovery cost for 2018 is $6457.031
Explanation:
for 2017:
additional first year depreciation = $75,000*50%
= $37,500
using 7-year MACRS mid quater converntion, the depreciation % for quater 4 is 3.57%
additional MACRS cost recovery = ($75,000 - $37,500)*3.57%
= $1338.75
total cost recovery for 2017 = $37,500 + $1338.75
= $38,838.75
for 2018, additional first year depreciation is $37,500
using 7-year MACRS mid quarter convention for next year, the depreciation % fpr quarter 4 is 27.55%
the machine sold in september , so it was used for two full quarters and half third quater
the recovery is computed for 2.5 over 4 quarters of a year
additional MARSC cost recovery = $37,500*27.55%*(2.5/4)
= $6457.031
total recovery cost for 2018 is $6457.031
Therefore, The total cost recovery for 2017 is $38,838.75 and The total recovery cost for 2018 is $6457.031
