Big Corp purchased a 30-channel data acquisition system for the research department in May 2000 for $17,500. They expected to use it for 8 years and thought that it would have a salvage value of $3300 at the end of that time. They normally use straight-line depreciation for such assets as the book depreciation method. Due to changes in the product line, they no longer needed the system, so it was sold in May 2002 for $5800.
a. What is the book value to be used in calculating their 2002 tax return? (Use the half- year convention of MACRS.)
b. What is the book value at the end of 2002 for any purpose other than taxes?