Question

1. A piece of newly purchased industrial equipment costs $1,240,000 and is classified as seven-year property under MACRS. Calculate the annual depreciation allowances and end-of-the-year book values for this equipment.

Answer 1

Answer:

Solution for the question is given below

Explanation:

Year OpeningValue MACRS Depreciation    Closing Book Value

1.         1,240,000       0.1429       177,196            1,062,804

2.          1,062,804       0.2449  260,280.69       802,523.30

3.            802,523.30     0.1749     140,361.32        662,161.97

4.           662,161.97       0.1249   82,704.03        579,457.93

5.            579,457.93       0.0893 51,745.59       527,712.33

6.            527,712.33       0.0892 47,071.94        480,640.40

7.            480,640.40       0.0893 42,921.18         437,719.21