Problem 9-5 Calculating Depreciation [LO 2] A piece of newly purchased industria
ID: 2624188 • Letter: P
Question
Problem 9-5 Calculating Depreciation [LO 2]
A piece of newly purchased industrial equipment costs $1,060,000 and is classified as seven-year property under MACRS. The MACRS depreciation schedule is shown in MACRS Table.
Calculate the annual depreciation allowances and end-of-the-year book values for this equipment. (Do not round intermediate calculations. Leave no cells blank. Enter "0" when necessary.)
A piece of newly purchased industrial equipment costs $1,060,000 and is classified as seven-year property under MACRS. The MACRS depreciation schedule is shown in MACRS Table.
Explanation / Answer
Rates of Depreciation Beginning Year Beginning Book Value Depreciation Allowance Ending Book Value 14.29% 1 $ 1,060,000.00 $ 151,474.00 $ 908,526.00 24.49% 2 $ 908,526.00 $ 259,594.00 $ 648,932.00 17.49% 3 $ 648,932.00 $ 185,394.00 $ 463,538.00 12.49% 4 $ 463,538.00 $ 132,394.00 $ 331,144.00 8.93% 5 $ 331,144.00 $ 94,658.00 $ 236,486.00 8.92% 6 $ 236,486.00 $ 94,552.00 $ 141,934.00 8.93% 7 $ 141,934.00 $ 94,658.00 $ 47,276.00 4.46% 8 $ 47,276.00 $ 47,276.00 $ -
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