Rounded Depreciation Percentages by Recovery Year Using MACRS forFirst Four Property ClassesRecovery year12347891011Totals3 years33%45%15%7%Percentage by recovery year*5 years20%32%19%12%12%5%7 years14%25%18%12%9%9%9%4%10 years10%18%14%12%9%8%7%6%6%6%4%100%100%100%100%*These percentages have been rounded to the nearest whole percent to simplify calculations whileretaining realism. To calculate the actual depreciation for tax purposes, be sure to apply the actualunrounded percentages or directly apply double-declining balance (200%) depreciation using the half-yearconvention. Depreciation In early 2019, Sosa Enterprises purchased a new machine for $11,800 to make cork stoppers for wine bottles. The machine has a 3-year recovery period and is expected to have a salvage value of $1,980. Develop a depreciation schedule for this asset using theMACRS depreciation percentages in the table iComplete the depreciation schedule for the asset below:(Round the percentage to the nearest integer and the depreciation to the nearest dollar.)Depreciation ScheduleYear1Cost(1)$11,800Percentage(2)%Depreciation(1) × (2)$C

Variables in the question:Cost of new machine=$11,800Recovery period=3 yearsUsing MACRS depreciation

Answered: Depreciation In early 2019, Sosa…

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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Use the depreciation table below to answer the questions that follow: Recovery Year 5 Years 7 Years 10 Years 1 20% 14% 10% 2 32% 25% 18% 3 19% 18% 14% 4 12% 12% 12% 5 12% 9% 9% 6 5% 9% 8% 7 9% 7% 8 4% 6% 9 6% 10 6% 11 4% Totals 100% 100% 100% Assuming a seven year asset has an original cost of $500,000. The asset is sold for $200,000 at the end of year 4. Calculate the net proceeds form the sale (30% tax rate). Assume a five year asset has a cost of $350,000 and is sold at he end of year 3 for $112,000. Calculate the net proceeds form the sale (30% tax rate). Assume a five year asset costs $700,000. This asset is replacing a seven year asset at the end of year four with an original cost of $500,000. The old asset will be sold for $$310,000. Assuming a 21% tax rate, and an addition to working capital of $25,000, calculate cash flow in year zero.
A 4 Estimated Residual: 5 Estimated Life in years: 6 Estimated Life in hours: 7 Actual Hours: 8 Year 1 Year 2 9 10 11 12 14 15 16 17 18 19 Year 3 Year 4 20 21 22 23 $ B 10,000 Year 1 2 Prepare the following Straight Line depreciation schedule by using the excel SLN FUNCTION (fx) to calculate the 13 Depreciation Expense for Years 1-4 in the Depreciation Expense column. Enter formulas or absolute cell references for the remaining cells. W|N 3 4 1200 4 360 270 350 220 с D SULLIVAN RANCH CORPORATION Depreciation Schedule-Straight Line Method End of year amounts Depreciation Expense E Accumulated Depreciation LL Book Value F
How much is the yearly depreciation using the straight line method A 950,400 B 936,000 C 860,400 D 846,000 Using the sum years of digits method, how much is the depreciation for the first year? A 1,560.000 B 1,584.000 C 1,410.000 D 1,434.000
A manufacturer of aerospace products purchased three flexible assembly cells for $450,000 each. Delivery and insurance charges were $40,000, and installation of the cells cost another $54,000. a. Determine the cost basis of the three cells. b. What is the class life of the cells? c. What is the MACRS depreciation in year three? d. If the cells are sold to another company for $100,000 each at the end of year seven, how much is the recaptured depreciation? Click the icon to view the partial listing of depreciable assets used in business. Click the icon to view the GDS Recovery Rates (rk). a. The cost basis of the three cells is $ thousand. (Round to the nearest whole number.) b. The class life of the cells is years. (Round to the nearest whole number.) c. The MACRS depreciation in year three is $ thousand. (Round to the nearest whole number.) d. The recaptured depreciation is $ thousand. (Round to the nearest whole number.)
Complete the Sum of depreation Useful 8 учет Sum of Sum of years digits method of Depreciation Rate Year 1 Year 3 A 个 Fraction Year 5 ↑
Connect: Cha... 6 Table 9.7 Modified ACRS depreciation allowances Saved Help Save & Exit Submit Property Class Year 3-Year 5-Year 7-Year Check my work 1 33.33% 20.00% 14.29% 2 44.45 32.00 24.49 3 14.81 19.20 17.49 4 7.41 11.52 12.49 An asset used in a four-year project falls in the five-year MACRS class (MACRS schedule) for tax purposes. The asset has an acquisition cost of $7,200,000 and will be sold for $1,620,000 at the end of the project. If the tax rate is 24 percent, what is the aftertax salvage value of the asset? Note: Do not round intermediate calculations and round your answer to the nearest whole number, e.g., 32. 7 5 11.52 8.93 6 5.76 8.92 8.93 8 4.46 Aftertax salvage value
You have been asked by the president of your company to evaluate the proposed acquisition of a new special-purpose truck for $60,000. The truck falls into the MACRS 3-year class, is not eligible for either bonus depreciation or Section 179 expensing, and it will be sold after three years for $20,000. Use of the truck will require an increase in NWC (spare parts inventory) of $2,000. The truck will have no effect on revenues, but it is expected to save the firm $20,000 per year in before-tax operating costs, mainly labor. The firm's marginal tax rate is 21 percent. ts What will the cash flows for this project be? (Negative amounts should be indicated by a minus sign. Round your answers to 2 decimal places.) Print Year 1 2 ferences FCF
On February 2, 2022, Alexandra purchases a personal computer. The computer cost $4,920. Alexandra uses the computer 85 percent of the time in her accounting business, and the remaining 15 percent of the time for various personal uses. Calculate Alexandra's maximum depreciation deduction for 2022 for the computer, assuming half-year convention and she does not use bonus depreciation or make the election to expense. Click here to access the depreciation table. If required, round your answer to nearest dollar.
Using the MACRS table in your sildes covering chapters 9-11 and for an asset purchased at a cost of $200.000 and considered class 7, what is the MACRS depreciation for years two through five? a) Second year: b) Third year: d) Fourth year: d) Fifth year:
A Cost 49, 300, # Computer System purchased by Jones Company Using the MACRS method Caleviate depreciation at the the accumulated 3. (Round all Dollar amounts. to A 35, 101.60 B 33, 345.54 C 40 780.9 و ما ان ها ,45 D 87 Abswer ky end of year newest Cent)
Chart of Accounts Instructions CHART OF ACCOUNTS Equipment acquired on January 6 at a cost of $360,550, has an estimated useful ife of 12 years and an estimated residual value of $69.910 General Ledger Required: a. What was the annual amount of deoreciation for Years 1-3 using the straight-ine method of depreciation? REVENUE ASSETS b. What was the book value of the equpment on January 1 of Year 47 410 Sales 110 Cash c Assuming that the equipment was sold on January 3 of Year 4 for $272.570, journalize the entry to record the sale Refer to the chart of 610 Interest Revenue accounts for the eract wording of the account ties CNOW journals do not use lines for journal explanations Every line on a journal page is used 111 Petty Cash 620 Gain on Sale of Delivery Truck for debit or credt entnes CNOW journals wit automaticaly indent a credit entry when a credit amount is entered 112 Accounts Receivable a. Assuming that the equipment had been sold on January 3 of Year 4 for $303,490 instead of…
An asset used in a four-year project falls in the five-year MACRS class for tax purposes. The asset has an acquisition cost of $6,110,000 and will be sold for $1,310,000 at the end of the project. If the tax rate is 21 percent, what is the aftertax salvage value of the asset? Refer to Table 8.3. (Do not round intermediate calculations and enter your answer in dollars, not millions of dollars, rounded to 2 decimal places, e.g., 1,234,567.89.) Aftertax salvage value es ( Prev 7 of 10 Next >

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