Del Norte Brick Co. is located near the intersec­tion of Texas, New Mexico, and Mexico. Improved access to the company’s property is via a small bridge across the Rio Grande. The cost of the bridge was $770,000. Determine the depreciation and book value for year 3 according to the MACRS method.

What will be an ideal response?


Recovery period is 15 years (Table 16-4)

D3 = 0.0855(770,000) = $65,835

BV3 = B - total depreciation through year 3
= 770,000(1 - 0.050 - 0.095 - 0.0855)
= $592,515

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