Harris Corp. is a technology start-up and is in its second year of operations. The company didnt purchase any assets this year but purchased the following assets in the prior year:

Asset	Placed in Service	Basis
Office equipment	August 14	$	10,000
Manufacturing equipment	April 15		68,000
Computer system	June 1		16,000
Total		$	94,000

Harris did not know depreciation was tax deductible until it hired an accountant this year and didnt claim any depreciation expense in its first year of operation. (Use MACRS Table 1 and Table 2.)

Hint: It is asking for the maximum cost recovery, so all of the assets except the Luxury auto could take the 179 deduction. On the luxury auto they could take 20% bonus and the 3,160 limit on autos.

a.	What is the maximum amount of depreciation expense Harris Corp. can deduct in its second year of operation (ignore bonus and 179 expense)?

b. What is the basis of the office equipment at the end of the second year?