College Accounting, Chapters 1-27
23rd Edition
ISBN: 9781337794756
Author: HEINTZ, James A.
Publisher: Cengage Learning,
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Chapter 5A, Problem 4SEB
MODIFIED ACCELERATED COST RECOVERY SYSTEM Using the information given in Exercise 5Apx-1B and the rates shown in Figure 5A-4, prepare a
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Accelerated methods of depreciation result in greater depreciation allowances than straight-line depreciation in the early years of the depreciation schedule. Suppose a personal property is eligible for a three-year cost recovery period and can be depreciated using 200 percent declining balance depreciation. Calculate the accelerated depreciation rate in the first year.
A) 28.57%
B) 33.33%
C) 14.28%
D) 66.66%
I have included the question and answer I just need to know how to get the answer. Chart attached.
Find the depreciation for the indicated year using MACRS cost-recovery rates for the properties placed in service at midyear. Round dollar amounts to the nearest cent.
Property Class: 3-year
Depreciation year: 3
Cost of property: $97,700
$14,469.37 - answer
An asset costs $290,000 and is classified as a ten-year asset. What is the annual depreciation expense for the first three years under the straight-line and the modified accelerated cost recovery systems of depreciation? Be sure to apply the half-year convention to straight-line depreciation. Use Exhibit 9.4 to answer the question. Round your answers to the nearest dollar.
Straight-line depreciation:
Year
Depreciation expense
1
$
2
$
3
$
Accelerated cost recovery system of depreciation:
Year
Depreciation expense
1
$
2
$
3
$
Chapter 5A Solutions
College Accounting, Chapters 1-27
Ch. 5A - List three depreciation methods used for financial...Ch. 5A - Which depreciation method is used for tax...Ch. 5A - STRAIGHT-LINE DEPRECIATION A small deliver truck...Ch. 5A - SUM-OF-THE-YEARS'-DIGITS DEPRECIATION Using the...Ch. 5A - Prob. 3SEACh. 5A - MODIFIED ACCELERATED COST RECOVERY SYSTEM Using...Ch. 5A - STRAIGHT-LINE DEPRECIATION A computer was...Ch. 5A - Prob. 2SEBCh. 5A - DOUBLE-DECLININGBALANCE DEPRECIATION Using the...Ch. 5A - MODIFIED ACCELERATED COST RECOVERY SYSTEM Using...
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- A global positioning system (GPS) receiver is purchased for $3,000. The IRS informs your company that the useful (class) life of the system is seven years. The expected market (salvage) value is $200 at the end of year seven. Solve, a. Use the straight-line method to calculate depreciation in year three. b. Use the 200% declining balance method to calculate the cumulative depreciation through year four.c. Use the MACRS method to calculate the cumulative depreciation through year five. d. What is the book value of the GPS receiver at the end of year four when straight-line depreciation is used?arrow_forwardPerform a PW-based evaluation of the two alternatives below. The after-tax MARR is 10% per year, MACRS depreciation applies, and T.= 42%. The (GI – OE) estimate is made for the first three years; it is zero in year 4 when each asset is sold. %3D Alternative First Cost. $ -8,000 -13,000 Salvage value, year 4, $ GI – OE, $ per year 3,500 5,000 Recovery period, yearsarrow_forwardA machine can be purchased for $150,000 and used for five years, yielding the following net incomes. In projecting net incomes, straight-line depreciation is applied using a five-year life and a zero salvage value. Compute the machine’s payback period (ignore taxes). (Round the payback period to three decimals.) Year 1 Year 2 Year 3 Year 4 Year 5 Net income . $10,000 $25,000 $50,000 $37,500 $100,000arrow_forward
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