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: Placed in Asset Service Basis Office equipment August 14 $ 11,200 Manufacturing equipment April 15 80,000 Computer system June 1 28,000 Total $ 106,000

Harris did not know depreciation was tax deductible until it hired an accountant this year and didnt claim any depreciation deduction in its first year of operation.

(Use MACRS Table 1 and Table 2.) (Round your intermediate dollar calculations and final answer to the nearest whole dollar amount.)

a. What is the maximum amount of depreciation deduction Harris Corp. can deduct in its second year of operation?

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