A piece of newly purchased industrial equipment costs $970,000 and is classified
ID: 2765310 • Letter: A
Question
A piece of newly purchased industrial equipment costs $970,000 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. Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.)
A piece of newly purchased industrial equipment costs $970,000 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. Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.)
Explanation / Answer
Year
Beginning Book Value
Dep %
Depreciation
Ending Book Value
1
9,700,000
14.29
1,386,130
8,313,870
2
8,313,870
24.49
2,375,530
5,938,340
3
5,938,340
17.49
1,696,530
4,241,810
4
4,241,810
12.49
1,211,530
3,030,280
5
3,030,280
8.93
866,210
2,164,070
6
2,164,070
8.92
865,240
1,298,830
7
1,298,830
8.93
866,210
432,620
8
432,620
4.46
432,620
-
Depreciation always calculated on Original value
Year
Beginning Book Value
Dep %
Depreciation
Ending Book Value
1
9,700,000
14.29
1,386,130
8,313,870
2
8,313,870
24.49
2,375,530
5,938,340
3
5,938,340
17.49
1,696,530
4,241,810
4
4,241,810
12.49
1,211,530
3,030,280
5
3,030,280
8.93
866,210
2,164,070
6
2,164,070
8.92
865,240
1,298,830
7
1,298,830
8.93
866,210
432,620
8
432,620
4.46
432,620
-
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