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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A pharmacy is planning to purchase a second-hand scanning microscope at a cost of BD10,500, and its estimated salvage value is BD500 and a projected useful life of four years. Determine the depreciation for 4th year using DB method and complete the depreciation schedules with depreciation values and book values.
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