A global positioning system (GPS) receiver is purchased for

$3,000.

The IRS informs your company that the useful (class) life of the system is

eight

years. The expected market (salvage) value is

$400

at the end of year

eight.

a. Use the straight line method to calculate depreciation in year

two.

b. Use the

200%

declining balance method to calculate the cumulative depreciation through year

three.

c. Use the MACRS method to calculate the cumulative depreciation through year

four.

d. What is the book value of the GPS receiver at the end of year

three

when straight line depreciation is used?

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Click the icon to view the summary of the principal features of GDS under MACRS.

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Click the icon to view the GDS Recovery Rates

(rk).

Question content area bottom

Part 1

a. Using the SL method, the depreciation amount in year

two

is

$enter your response here.

(Round to the nearest dollar.)

Part 2

b. Using the

200%

DB method, the the cumulative depreciation through year

three

is

$enter your response here.

(Round to the nearest dollar.)

Part 3

c. Using the MACRS method, the cumulative depreciation through year

four

is

$enter your response here.

(Round to the nearest dollar.)

Part 4

d. The book value of the GPS receiver at the end of year

three

when straight line depreciation is used is

$enter your response here.

(Round to the nearest dollar.)