IRS Publication 946 illustrates how one can utilize depreciation to recover the

Question

IRS Publication 946 illustrates how one can utilize depreciation to recover the cost of business or income-producing property. One of the key elements in determining the correct annual depreciation amount is determining the appropriate property class. The property classes are listed in Appendix B of this publication with the class life and correct recovery periods for both General Depreciation System (GDS) and the Alternative Depreciation System (ADS).

The asset classes is further associated with your corresponding General Ledger codes. This allows the business rules in Bassets depreciation to set the correct default depreciation values during asset data entry and ensure correct calculations.

IRS Publication 946 Table B 2 and Asset Classification - 32.2 clearly the assets which are utilized in the manufacturing of cement but include assets used in the manufacture of concrete and concrete products nor in any mining or extraction process

Explanation / Answer

Situation: You have just purchased a new shaker table for your cement manufacturing company. You bought the shaker table new for $5,000 in January 2016. Salvage Value after two years is $3,000. Use the tables from IRS Publication 946. 1. What is the asset class for this new equipment?

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