You just bought a capital asset for $452,400 which is classified by GAAP as a 7-

Question

You just bought a capital asset for $452,400 which is classified by GAAP as a 7-year asset for tax purposes. Using the following MACRS depreciation schedule determine the depreciation expense each year and the book value of the asset at the end of year five.

You just bought a capital asset for $452,400 which is classified by GAAP as a 7-year asset for tax purposes. Using the following MACRS depreciation schedule determine the depreciation expense each year and the book value of the asset at the end of year five.

Explanation / Answer

Hi,

Please find the answer as follows:

Book Value at the end of Year 5 = 452400 - 64647.96 - 110792.76 - 79124.7 - 56504.76 - 40399.32 = 100930.5

Thanks.

Years Depreciation Rate Depreciation Expense Year 1 14.29% 64647.96 Year 2 24.49% 110792.76 Year 3 17.49% 79124.76 Year 4 12.49% 56504.76 Year 5 8.93% 40399.32 Year 6 8.92% 40354.08 Year 7 4.46% 20177.04

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