Question

A computer system purchased by jones company cost $45,900. using the macrs method, calculate the accumulated depreciation at the end of year 3. (round all dollar amounts to the nearest cent)

Answer 1

To calculate the accumulated depreciation using the MACRS method, we need to know the useful life of the computer system. Assuming a useful life of 5 years, the accumulated depreciation at the end of Year 3 would be $32,619.

Step-by-step explanation:

To calculate the accumulated depreciation using the MACRS (Modified Accelerated Cost Recovery System) method, we need to know the useful life of the computer system. The MACRS method allows for depreciation deductions over a specified number of years. Each year, a certain percentage of the initial cost is deducted as depreciation expense.

Assuming the useful life of the computer system is 5 years:

- Year 1 depreciation: 20%

- Year 2 depreciation: 32%

- Year 3 depreciation: 19%

To calculate the accumulated depreciation at the end of Year 3, we add up the depreciation deductions for the first three years: (Initial cost) x (Year 1 depreciation + Year 2 depreciation + Year 3 depreciation).

In this case, the accumulated depreciation at the end of Year 3 would be $45,900 x (20% + 32% + 19%) = $45,900 x 0.71 = $32,619.