1.

Trident Developers purchased a computer system for $100,000 on June 4, 2003. The computer system is used for business 100% of the time. The accountant for the company elected to take a $12,000 Section 179 deduction, and the asset qualified for a special depreciation allowance (see Table 17-4).

Click here for Table 17-4

a. What was the basis for depreciation of the computer system?

$

b. What was the amount of the first year's depreciation using MACRS?

Click here for Table 17-1 and Table 17-2

$

2.

Use the declining-balance method of depreciation to complete the table below. Round to the nearest hundredth of a percent when necessary.

Do not enter the percent symbol in your answer.

Useful Life (Years)	Straight-Line Rate (%)	Multiple (%)	Declining-Balance Rate (%)
3	%	200	%

3.

Use the declining-balance method of depreciation to complete the table below. Round to the nearest hundredth of a percent when necessary.

Do not enter the percent symbol in your answer.

Useful Life (Years)	Straight-Line Rate (%)	Multiple (%)	Declining-Balance Rate (%)
9	%	150	%

4.

ompanies depreciate, or write off, the expense of tangible assets such as trucks and equipment over a period of their useful lives. Many companies also have intangible assets that must be accounted for as an expense over a period of time.

Intangible assets are resources that benefit the company but do not have any physical substance. Some examples are copyrights, franchises, patents, trademarks, and leases. In accounting, intangible assets are written off in a procedure known as asset amortization. This is much like straight-line depreciation, but there is no salvage value.

You are the accountant for Front Line Pharmaceuticals, Inc. In January 2000, the company purchased the patent rights for a new medication from Novae, Inc., for $8,700,000. The patent had 15 years remaining as its useful life. In January 2005, Front Line Pharmaceuticals successfully defended its right to the patent in a lawsuit that cost $500,000 in legal fees.

a. Using the straight-line method, calculate the patent's annual amortization expense for the years before the lawsuit.

$

b. Calculate the revised annual amortization expense for the remaining years after the lawsuit.

$