During its current tax year (year one), a pharmaceutical company purchased a mixing tank that had a fair market price of $125,000. It replaced an older, smaller mixing tank that had a BV of $20,000. Because a special promotion was underway, the old tank was used as a trade-in for the new one, and the cash price (including delivery and installation) was set at $102,000. The MACRS class life for the new mixing tank is 9.5 years. If 200% DB depreciation had been applied to this problem, what would be the accumulative depreciation through the end of year four Select one: O a. $21,984 O b. $47,601.09 OC. $21,081.6 O d. $23,424

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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During its current tax year (year one), a pharmaceutical company purchased a mixing tank that had a fair
market price of $125,000. It replaced an older, smaller mixing tank that had a BV of $20,000. Because a
special promotion was underway, the old tank was used as a trade-in for the new one, and the cash price
(including delivery and installation) was set at $102,000. The MACRS class life for the new mixing tank is 9.5
years. If 200% DB depreciation had been applied to this problem, what would be the accumulative
depreclation through the end of year four
Select one:
O a. $21,984
O b. $47,601.09
O C. $21,081.6
O d. $23,424
Transcribed Image Text:During its current tax year (year one), a pharmaceutical company purchased a mixing tank that had a fair market price of $125,000. It replaced an older, smaller mixing tank that had a BV of $20,000. Because a special promotion was underway, the old tank was used as a trade-in for the new one, and the cash price (including delivery and installation) was set at $102,000. The MACRS class life for the new mixing tank is 9.5 years. If 200% DB depreciation had been applied to this problem, what would be the accumulative depreclation through the end of year four Select one: O a. $21,984 O b. $47,601.09 O C. $21,081.6 O d. $23,424
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Section 179 Deduction and Modified Accelerated Cost Recovery System (MACRS) Depreciation
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