An asset for drilling was purchased and placed in service by a petroleum production company. Its cost basis is $80,000, and it has an estimated MV of $14.000 at the end of an estimated useful life of 10 years. Compute the depreciation amount in the fourth year and the BV at the end of the sixth year of life by each of these methods: a. The SL method. b. The 200% DB method with switchover lo SL c. The GDS. d. The ADS. Click the icon to view the partial listing of depreciable assets used in business Click the con to view the GDS Recovery Rates ). a. Using the SL method the depreciation amount in the fourth year is S . (Round to the nearest dollar) i More Info i More Info MACRS Class Lives and Recovery Periods Recovery Periods GDS ADS Assot Class Class Life 00.11 00.12 00.22 00.23 00.241 Descriptions of Assets om furniture and equipment Information systems, including computers Automobiles, taxis Buses Light general purpose trucks Heavy general purpose trucks Tractor units for use over the road Agriculture 00.242 00.26 01.1 GDS Recovery Rates (r) for the Six Personal Property Classes Recovery Period (and Property Class) 3-year 5-year 7-year 10-year 15-year 0.3333 0.2000 0.1429 0.1000 0.0500 0.4445 0.3200 0.2449 0.1900 0.0960 0.1481 0.1920 0.1749 0.1440 0.0955 0.0741 0.1152 0.1249 0.1152 0.0770 0.1152 0.0893 0.0922 0.0693 0.0576 0.0192 0.0737 0.0823 0.0093 0.0955 0.0590 0.0446 0.0955 0.0590 0.0556 0.0591 0.0955 0.0590 0.0328 0.0591 0.0590 0.0591 0.0590 0.0591 0.0295 20-year 0.0375 0.0722 0.0668 0.0818 0.0571 0.0528 0.0489 0.0452 0.0447 0.0447 0.0446 0.0446 0.0446 0.0446 0.0446 10.0 Mining 13.2 13.3 16.0 22.3 varauuuuu 28.0 Production of petroleum and natural gas Petroleum refining Construction Manufacture of carpets Manufacture of wood products and furniture Manufacture of chemicals and aliec products Manufacture of rubber products Manufacture of cement Manufacture of fabricated metal products Manufacture of electronic components, products, and systems Manufacture of motor vehicles Manufacture of aerospace products Telephone central office equipment Electric utility stoom production plant Gas utility distribution facilities Recreation 17 30.1 32.2 34.0 36.0 37.11 37.2 48.12 49.13 49.21 79.0 0.0448 00446 En 21 0.0223 These rates are determined by applying the 200% DB method (with switchover to the SL method) to the recovery period with the half-year convention applied to the first and last years. Rates for each period must sum to 1.000. Answer An asset for drilling was purchased and placed in service by a petroleum production company. Its cost basis is $80,000, and it has an estimated MV of $14.000 at the end of an estimated useful life of 10 years. Compute the depreciation amount in the fourth year and the BV at the end of the sixth year of life by each of these methods: a. The SL method. b. The 200% DB method with switchover lo SL c. The GDS. d. The ADS. Click the icon to view the partial listing of depreciable assets used in business Click the con to view the GDS Recovery Rates ). a. Using the SL method the depreciation amount in the fourth year is S . (Round to the nearest dollar) i More Info i More Info MACRS Class Lives and Recovery Periods Recovery Periods GDS ADS Assot Class Class Life 00.11 00.12 00.22 00.23 00.241 Descriptions of Assets om furniture and equipment Information systems, including computers Automobiles, taxis Buses Light general purpose trucks Heavy general purpose trucks Tractor units for use over the road Agriculture 00.242 00.26 01.1 GDS Recovery Rates (r) for the Six Personal Property Classes Recovery Period (and Property Class) 3-year 5-year 7-year 10-year 15-year 0.3333 0.2000 0.1429 0.1000 0.0500 0.4445 0.3200 0.2449 0.1900 0.0960 0.1481 0.1920 0.1749 0.1440 0.0955 0.0741 0.1152 0.1249 0.1152 0.0770 0.1152 0.0893 0.0922 0.0693 0.0576 0.0192 0.0737 0.0823 0.0093 0.0955 0.0590 0.0446 0.0955 0.0590 0.0556 0.0591 0.0955 0.0590 0.0328 0.0591 0.0590 0.0591 0.0590 0.0591 0.0295 20-year 0.0375 0.0722 0.0668 0.0818 0.0571 0.0528 0.0489 0.0452 0.0447 0.0447 0.0446 0.0446 0.0446 0.0446 0.0446 10.0 Mining 13.2 13.3 16.0 22.3 varauuuuu 28.0 Production of petroleum and natural gas Petroleum refining Construction Manufacture of carpets Manufacture of wood products and furniture Manufacture of chemicals and aliec products Manufacture of rubber products Manufacture of cement Manufacture of fabricated metal products Manufacture of electronic components, products, and systems Manufacture of motor vehicles Manufacture of aerospace products Telephone central office equipment Electric utility stoom production plant Gas utility distribution facilities Recreation 17 30.1 32.2 34.0 36.0 37.11 37.2 48.12 49.13 49.21 79.0 0.0448 00446 En 21 0.0223 These rates are determined by applying the 200% DB method (with switchover to the SL method) to the recovery period with the half-year convention applied to the first and last years. Rates for each period must sum to 1.000