An asset for drilling was purchased and placed in service by a petroleum production company. Its cost basis is $55,000, and it has an estimated MV of $13,000 at the end of an estimated useful life of 12 years. Compute the depreciation amount in the second year and the BV at the end of the fifth year of life by each of these methods: a. The SL method. b. The 200% DB method with switchover to SL. c. The GDS. d. The ADS. Click the icon to view the partial listing of depreciable assets used in business. Click the icon to view the GDS Recovery Rates (rk). MACRS Class Lives and Recovery Periods Asset Class 00.11 00.12 00.22 00.23 00.241 00.242 00.26 01.1 10.0 13.2 13.3 15.0 22.3 24.4 28.0 30.1 32.2 34.0 36.0 37.11 37.2 48.12 49.13 49.21 79.0 Descriptions of Assets Office 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 Mining Production of petroleum and natural gas Petroleum refining Construction Manufacture of carpets Manufacture of wood products and furniture Manufacture of chemicals and allied 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 steam production plant Gas utility distribution facilities Recreation Class Life 10 6 3 9 4 6 4 10 10 14 16 6 9 10 9.5 14 20 Recovery Periods GDS ADS 7 10 5 5 5 5 5 9 5 5 6 3 4 7 10 7 10 7 14 10 16 5 6 5 9 7 10 5 9.5 7 14 15 20 7 12 5 6 7 7 10 10 18 20 20 35 7 10 12 12 6 12 10 18 28 35 10 28 Year 1 2 3 4 5 6 7 8 GDS Recovery Rates (rk) for the Six Personal Property Classes Recovery Period (and Property Class) 3-yeara 5-yeara 7-yeara 10-yeara 15-yearb 0.3333 0.2000 0.1429 0.1000 0.0500 0.4445 0.3200 0.2449 0.1800 0.0950 0.1481 0.1920 0.1749 0.1440 0.0855 0.0741 0.1152 0.1249 0.1152 0.0770 0.1152 0.0893 0.0922 0.0693 0.0576 0.0892 0.0737 0.0623 0.0893 0.0655 0.0590 0.0446 0.0655 0.0590 0.0656 0.0591 0.0655 0.0590 0.0328 0.0591 0.0590 0.0591 0.0590 0.0591 0.0295 9 10 20-yearb 0.0375 0.0722 0.0668 0.0618 0.0571 0.0528 0.0489 0.0452 0.0447 0.0447 0.0446 0.0446 0.0446 0.0446 0.0446 0.0446 0.0446 0.0446 0.0446 0.0446 11 12 13 14 15 16 17 18 19 20