Exhibit 11-05
Wilson is preparing his tax returns using the MACRS convention. The following information relates to the purchase of an asset on January 1, Year 1.
MACRS Depreciation as a Percentage of the Cost of the Asset
-Refer to Exhibit 11-05, what amount of depreciation would have been recorded in Wilson's books for year 3?

Question

Exhibit 11-05
Wilson is preparing his tax returns using the MACRS convention. The following information relates to the purchase of an asset on January 1, Year 1.
MACRS Depreciation as a Percentage of the Cost of the Asset  
-Refer to Exhibit 11-05, what amount of depreciation would have been recorded in Wilson's books for year 3?

Quizplus · Accepted Answer

The correct amount of depreciation for year 3 can be calculated using the information provided in Exhibit 11-05. Without the specific details from Exhibit 11-05, the general approach to calculate depreciation for year 3 would involve knowing the method of depreciation being used (straight-line, declining balance, units of production, etc.), the asset's cost, its salvage value, and its useful life. The answer provided as correct (B) suggests a specific depreciation amount, which implies a calculation based on given data. However, without the exhibit details, a precise explanation can't be provided, but typically, this amount would result from applying the appropriate depreciation method to the asset's book value at the beginning of year 3.

Exhibit 11-05 Wilson Is Preparing His Tax Returns Using the MACRS Convention