Patrick Purchased a Used Passenger Automobile on June 1, 2018

question 6

Essay

Patrick purchased a used passenger automobile on June 1, 2018.He paid $19,000 for the automobile.During 2018, he uses the automobile 75 percent of the time for business.Patrick wishes to claim the maximum amount of depreciation possible (no bonus depreciation or election to expense).
a.Calculate Patrick's depreciation expense on the automobile for 2018.
b.​Calculate Patrick's depreciation expense on the automobile for 2019, assuming the same 75 percent business use.

---

Definitions:

Required Reserve Ratio

The fraction of deposits that banks are required to keep on hand as reserves, determined by central banks to influence money supply and lending.

U.S. Treasury Securities

Debt instruments issued by the United States Department of the Treasury to finance government spending as an alternative to taxation.

Money Supply Curve

A representation showing the relationship between the money supply and the interest rate, inverting the money demand curve's concept.

Planned Investment

Investments that businesses intend to make in the future, often based on projected economic conditions or expected returns.