Harris Corp. is a technology start-up currently in its second year of operations. The company didnt purchase any assets this year but purchased the following assets in the prior year:

	Placed in
Asset	Service		Basis
Office equipment	August 14	$	12,200
Manufacturing equipment	April 15		90,000
Computer system	June 1		38,000
Total		$	140,200

Harris did not know depreciation was tax deductible until it hired an accountant this year and didnt claim any depreciation deduction in its first year of operation.

Problem 10-55 Part a (Algo)

a. What is the maximum amount of depreciation deduction Harris Corp. can deduct in its second year of operation?

b. What is the basis of the office equipment at the end of the second year?