A tractor for over-the-road hauling is purchased for $90,000. It is expected to be of use to the company for 6 years, after which it will be salvaged for $4,000. Calculate the depreciation deduction and the unrecovered investment during each year of the tractor's life using MACRS-GDS allowances. a. What is the MACRS-GDS property class? ANSWER O b. Assume the tractor is used for the full 6 years ANSWER + c. Assume the tractor is sold during the 4th year of use. ANSWER O d. Assume the tractor is sold during the 3rd year of use.
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- Referring to PA7 where Kenzie Company purchased a 3-D printer for $450,000, consider how the purchase of the printer impacts not only depreciation expense each year but also the assets book value. What amount will be recorded as depreciation expense each year, and what will the book value be at the end of each year after depreciation is recorded?The following intangible assets were purchased by Hanna Unlimited: A. A patent with a remaining legal life of twelve years is bought, and Hanna expects to be able to use it for six years. It is purchased at a cost of $48,000. B. A copyright with a remaining life of thirty years is purchased, and Hanna expects to be able to use it for ten years. It is purchased for $70,000. Determine the annual amortization amount for each intangible asset.Montello Inc. purchases a delivery truck for $25,000. The truck has a salvage value of $6,000 and is expected to be driven for 125,000 miles. Montello uses the units-of-production depreciation method, and in year one the company expects the truck to be driven for 26,000 miles; in year two, 30,000 miles; and in year three, 40,000 miles. Consider how the purchase of the truck will impact Montellos depreciation expense each year and what the trucks book value will be each year after depreciation expense is recorded.
- Montello Inc. purchases a delivery truck for $25,000. The truck has a salvage value of $6,000 and is expected to be driven for ten years. Montello uses the straight-line depreciation method. Calculate the annual depreciation expense.A tractor for over-the-road hauling is purchased for $90,000. It is expected to be of use to the company for 6 years, after which it will be salvaged for $4,000. Calculate the depreciation deduction and the unrecovered investment during each year of the tractor’s life using MACRS-GDS allowances. a. What is the MACRS-GDS property class? b. Assume the tractor is used for the full 6 years. c. Assume the tractor is sold during the 4th year of use. d. Assume the tractor is sold during the 3rd year of use.A tractor for over-the-road hauling is purchased for $75,000.00. It is expected to be of use to the company for 6 years, after which it will be salvaged for $4,200.00. Calculate the depreciation deduction and the unrecovered investment during each year of the tractors life. a. Use straight-line depreciation. Provide depreciation and book value for year 6. Depreciation for year 6 = $ 7080 book value for year 6 = $ 32520 b. Use declining-balance depreciation, with a rate that ensures the book value equals the salvage value. Provide depreciation and book value for year 6. Depreciation for year 6 = $ book value for year 6 = $ 4449.46 13348.39 c. Use double declining balance depreciation. Provide depreciation and book value for year 6. Depreciation for year 6 = $ 4915.20 book value for year 6 = $ 19660.80 d. Use double declining balance, switching to straight-line depreciation. Provide depreciation and book value for year 6. Depreciation for year 6 = $ 7080 book value for year 6 = $ 32520
- A tractor for over-the-road hauling is purchased for $95,000.00. It is expected to be of use to the company for 6 years, after which it will be salvaged for $3,200.00. Calculate the depreciation deduction and the unrecovered investment during each year of the tractors life. a. Use straight-line depreciation. Provide depreciation and book value for year 6. Depreciation for year 6 = $ book value for year 6 = $ b. Use declining-balance depreciation, with a rate that ensures the book value equals the salvage value. Provide depreciation and book value for year 6. Depreciation for year 6 = $ book value for year 6 = $ c. Use double declining balance depreciation. Provide depreciation and book value for year 6. Depreciation for year 6 = $ book value for year 6 = $ d. Use double declining balance, switching to straight-line depreciation. Provide depreciation and book value for year 6. Depreciation for year 6 = $ book value for year 6 = $ Do all computations to 5 decimal places and round final…A tractor for over-the-road hauling is purchased for $80,000.00. It is expected to be of use to the company for 6 years, after whic will be salvaged for $3,200.00. Calculate the depreciation deduction and the unrecovered investment during each year of the tractors life. a. Use straight-line depreciation. Provide depreciation and book value for year 6. Depreciation for year 6 = $ book value for year 6 = $ b. Use declining-balance depreciation, with a rate that ensures the book value equals the salvage value. Provide depreciation and book value for year 6. Depreciation for year 6 = $ book value for year 6 = $ c. Use double declining balance depreciation. Provide depreciation and book value for year 6. Depreciation for year 6 = $ book value for year 6 = $ d. Use double declining balance, switching to straight-line depreciation. Provide depreciation and book value for year 6. Depreciation for year 6 = $ book value for year 6 = $ Do all computations to 5 decimal places and round final…A tractor for over-the-road hauling is purchased for $75,000.00. It is expected to be of use to the company for 6 years, after w will be salvaged for $4,200.00. Calculate the depreciation deduction and the unrecovered investment during each year of the life. a. Use straight-line depreciation. Provide depreciation and book value for year 6. Depreciation for year 6 = $ 11800 book value for year 6 = $ 4200 b. Use declining-balance depreciation, with a rate that ensures the book value equals the salvage value. Provide depreciation a value for year 6. Depreciation for year 6 = $ book value for year 6 = $ 25934.79 4200 c. Use double declining balance depreciation. Provide depreciation and book value for year 6. Depreciation for year 6 = $ 5679.01 book value for year 6 = $ 4200 d. Use double declining balance, switching to straight-line depreciation. Provide depreciation and book value for year 6. Depreciation for year 6 = $ 7080 book value for year 6 = $ 32520
- Your company has purchased a large new truck-tractor for over-the-road use (asset class 00.26). It has a cost basis of $180,000. With additional options costing $15,000, the cost basis for depreciation purposes is $195,000. Its MV at the end of five years is estimated as $40,000. Assume it will be depreciated under the GDS: Solve, a. What is the cumulative depreciation through the endof year three? b. What is the MACRS depreciation in the fourth year? c. What is the BV at the end of year two?A gas-powered electric generator is purchased by a public utility as part of an expansion program. It is expected to be useful, with proper maintenance, for an estimated 30 years. The cost is $17 million, installed. The salvage value at the end of 30 years is expected to be 10% of the original cost, not counting installation. a. What is the MACRS-GDS property class? b. Determine the depreciation deduction and the unrecovered investment for years 1, 5, and the last depreciable year of the generator.Your company has purchased a large new trucktractor for over-the-road use (asset class 00.26). It has a cost basis of $179,000. With additional options costing $14,000, the cost basis for depreciation purposes is $193,000. Its MV at the end of six years is estimated as $36,000. Assume it will be depreciated under the GDS: a. What is the cumulative depreciation through the end of year two? b. What is the MACRS depreciation in the second year? c. What is the BV at the end of year one? 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 cumulative depreciation through the end of year two is $ (Round to the nearest dollar.) b. The MACRS depreciation in the second year is $ (Round to the nearest dollar.) c. The BV at the end of year one is $ (Round to the nearest dollar.)
