8 An asset is purchased for 250000 The asset is depreciated

8. An asset is purchased for $250,000. The asset is depreciated using MACRS depreciation and a five year recovery period. At the end of the fourth year of use the business changed its product mix and disposed of the asset. Find the depreciation allowed in the third year

Solution

Depreciation allowed in the third year = 48000

Year	Depreciation rate	Depreciation
1	20 %	250000 * 0.20 = 50000
2	32 %	250000 * 0.32 = 80000
3	19.20 %	250000 * 0.192 = 48000