Electric utility transmission and distribution equipment (MACRS-GDS 20-year property) is placed in service at a cost of $300,000. It is expected to last 30 years with a salvage value of $15,000. Determine the depreciation deduction and the book value during each year of the first 4 tax years using MACRS-GDS allowances. a. Use 50% bonus depreciation. b. Use 100% bonus depreciation.

Electric utility transmission and distribution equipment (MACRS-GDS 20-year property) is placed in service at a cost of $300,000. It is expected to last 30 years with a salvage value of $15,000. Determine the depreciation deduction and the book value during each year of the first 4 tax years using MACRS-GDS allowances. a. Use 50% bonus depreciation. b. Use 100% bonus depreciation.

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter11: Long-term Assets

Section: Chapter Questions

Problem 4EA: Montello Inc. purchases a delivery truck for $15,000. The truck has a salvage value of $3,000 and is...

See similar textbooks

Similar questions

Montello Inc. purchases a delivery truck for $15,000. The truck has a salvage value of $3,000 and is expected to be driven for 120,000 miles. Montello uses the units-of-production depreciation method and in year one it expects to use the truck for 23,000 miles. Calculate the annual depreciation expense.
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.
Electric generating and transmission equipment is placed in service at a cost of $3,000,000. It is expected to last 30 years with a salvage value of $250,000.a. What is the MACRS-GDS property class? b. Determine the depreciation deduction and the unrecovered investment during each of the first 4 tax years.
A mold for manufacturing medical supplies (MACRS-GDS 5-year property) is purchased at the beginning of the fiscal year for $30,000. The estimated salvage value after 10 years is $3,000. Calculate the depreciation deduction and the book value during each year of the asset’s life using MACRS-GDS allowances. a. Use 50% bonus depreciation. b. Use 100% bonus depreciation.
Computers and peripheral equipment will be purchased for $27,000. It is 5-year MACRS-GDS property and qualifies for 50% bonus depreciation. What are the depreciation values in years 1 and 2? a. $13,500 and $4,320 b. $16,200 and $4,320 c. $27,000 and $0 d. $5,400 and $8,640.
Electric utility transmission and distribution equipment (MACRS-GDS 20-year property) is placed in service at a cost of $300,000. It is expected to last 30 years with a salvage value of $15,000. Determine the depreciation deduction and the book value during each year of the first 4 tax years using MACRS-GDS allowances.
An investment of $800,000 is made in equipment that qualifies as 3-year equipment for MACRS-GDS depreciation. The BTCF profile for the investment is given below, including a $200,000 salvage value at the end of the 5-year planning horizon. A 25% tax rate applies and the after-tax MARR is 8%. Determine the ATCF for each year and the after-tax PW, AW, IRR, and ERR.
Electric generating and transmission equipment is placed in service at a cost of $3,400,000. It is expected to last 30 years with a salvage value of $250,000. Part a What is the MACRS-GDS property class? 20-Year Property V Show Transcribed Text 0 Determine the depreciation deduction and the unrecovered investment during each of the first 4 tax years. ΕΟΥ Depreciation Deduction Unrecovered Investment 1 Your answer is correct. 2 3 4 $ $ $ $ $ $ $ 3 $
A taxpayer wants to place in service a $10,000 asset that is assigned to the five-year class. Compute the MACRS percentages and the depreciation amounts for the asset. Given: Five-year asset, half-year convention, \alpha =40% and S=0 Find: MACRS depreciation percentages Dn for $10,000 asset.
Consider an asset cost 1.5 million and is depreciated straight ine to zero over its eight years tax life . The asset is to be used in a six year project and at the end of the project the asset can be sold for 250,000 $ . If the tax rate is 24 % calculate the after tax salvage of the asset
An asset is purchased for $90,000 with the intention of keeping it for 10 years, but is sold at the end of year 3. A total of $30,000 was borrowed money that was to be repaid over three years in equal annual payments, including principal and interest. The depreciation is correct for the appropriate MACRS Recovery Period. MARRAT = 12%. a. What is the MACRS property class of the asset? b. What is the salvage value received at the end of year 3? c. What is the loan interest rate? d. What is the book value at the end of year 3? e. Determine the values of the entries in the empty cells.
Company A is considering the purchase of a new equipment. This equipment will cost $250,000 and will be depreciated using an MACRS GDS recovery period of 7 years. The equipment is expected to have a market value of $50,000 at the end of its estimated 8-year life. What is the depreciation amount on the second year? What is the Book Value at the end of the 3rdyear? Assume that the asset will be disposed of in year 3.