Mike purchased a heavy-duty truck (five yearclass recovery property) for his delivery service on April 30,2008. The truck is not considered a passenger automobile for purposes of the listed property and luxury automobile limitations. The truck has a depreciable basis of $39,080 and an estimated useful life of 5 years. Its estimated salvage value is $1,080. Assume no election to expense is made and bonus depreciation istaken.
a. Calculate the amount of depreciation for 2008 using financial accounting (not the straight-line MACRS election) straight-line depreciation over the truck's estimated useful life.
b. Calculate the amount of depreciation for 2008 using the straight-line depreciation election under MACRS over the minimum number of years
c. Calculate the amount of accelerated depreciation for 2008 that Mike could deduct using the Modified Accelerated Cost.