QUESTION 6

A manufacturing company has purchased three assets:

Item Lathe

Truck

Building Initial cost $43,000 $25,000 $900,000 Book life 12 years 200,000 miles 50 years MACRS class 7 years 5 years 39 years Salvage value $3,000 $2,000 $100,000 Book depreciation DDB Unit production (UP) SL The truck was depreciated by theunits-of-production method. Usage of the truck was 22,000 miles, 30,000 and 45,000 miles during the first three years, respectively. Calculate the depreciation stated for each asset for the first three years. For the Lathe use DDB. For the building consider it was bought onMay of Year 1.