A piece of newly purchased industrial equipment costs $975,000 and is classified

Question

A piece of newly purchased industrial equipment costs $975,000 and is classified as seven-year property under MACRS. The MACRS depreciation schedule is shown in Table 10.7. Calculate the annual depreciation allowances and end-of-the-year book values for this equipment. (Leave no cells blank - be certain to enter "0" wherever required. Round your answers to 2 decimal places. (e.g., 32.16))

A piece of newly purchased industrial equipment costs $975,000 and is classified as seven-year property under MACRS. The MACRS depreciation schedule is shown in Table 10.7. Calculate the annual depreciation allowances and end-of-the-year book values for this equipment. (Leave no cells blank - be certain to enter "0" wherever required. Round your answers to 2 decimal places. (e.g., 32.16))

Explanation / Answer

Hi,

Please find the answer as follows:

Notes:

Depreciation is calculated by Multiplying the Cost of Machine with the Annual Depreciation Rate provided in MACRS Table.

Thanks.

Year Beginning Book Value Depreciation Ending Book Value 1 975000.00 139327.50 835672.50 2 835672.50 238777.50 596895.00 3 596895.00 170527.50 426367.50 4 426367.50 121777.50 304590.00 5 304590.00 87067.50 217522.50 6 217522.50 86970.00 130552.50 7 130552.50 87067.50 43485.00 8 43485.00 43485.00 0.00

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