Answer:
ASSET ORIGINAL BASIS RATE PROPORTION DEPRECIATION
Furniture $60,000 8.93% 50% $2679
Machinery $72,000 10.93% 12.5% $983.70
Truck $20,000 19.20% 50% $1920
Machinery $280,000 7.55% 62.5% $48,212.50
Computer $80,000 50% <u> - </u>
TOTAL <u> $53,795.20</u>
Explanation:
Based on the MARCS depreciation table rates:
For a 7-year recovery period under the Half-Year (HY) Convention, in the 5th year rate = 8.93%
For a 7-year recovery period under the Mid-Quarter (MQ) Convention, purchased during the first quarter, in the 4th year rate = 10.93%
For a 5-year recovery period under the Half-Year (HY) Convention, in the 3rd year rate = 19.20%
For a 7-year recovery period under the Mid-Quarter (MQ) Convention, purchased during the fourth quarter, in the 2nd year rate = 27.55%
For disposal during a year,
Under the Half-year convention. The depreciation amount would be half i.e 50% of the total depreciation for the year
Under the Mid-quarter convention the percentage applied to the full year disposal is
12.5% for First Quarter
37.5% for Second Quarter
62.5% for Third Quarter
87.5% for Fourth Quarter
