A company purchased new mining equipment in year 2018 by paying $400,000 cash. The company plans to keep the equipment for several years and use MACRS-GDS depreciation for tax purposes. Click the icon to view the partial listing of depreciable assets used in business. Click the icon to view the GDS Recovery Rates (k). Calculate the depreciation that the company claimed on the asset for year 2 of ownership. OA. $48,980 OB. $34,980 OC. $17,840 O D. $69,960 ○ E. $97,960 Calculate the book value of the asset at the end of year 2. OA. $365,020 OB. $293,860 OC. $209,900 More Info O D. $244,880 O E. $174,920 C More Info GDS Recovery Rates (r) for the Six Personal Property Classes Recovery Period (and Property Class) Year 3-year 5-year 7-year³ 10-year² 15-yearb 20-yearb 1 0.3333 0.2000 0.1429 0.1000 0.0500 0.0375 2 0.4445 0.3200 0.2449 0.1800 0.0950 0.0722 3 0.1481 0.1920 0.1749 0.1440 0.0855 0.0668 4 0.0741 0.1152 0.1249 0.1152 0.0770 0.0618 0.1152 0.0893 0.0922 0.0693 0.0571 0.0576 0.0892 0.0737 0.0623 0.0528 0.0893 0.0655 0.0590 0.0489 0.0446 0.0655 0.0590 0.0452 0.0656 0.0591 0.0447 0.0655 0.0990 0.0590 0.0447 0.0328 0.0591 0.0440 0.0590 0.0446 0.0591 0.0446 0.0590 0.0446 0.0591 0.0446 0.0295 0.0446 0.0446 0.0446 0.0446 0.0446 0.0223 7 8 9 10 11 12 MACRS Class Lives and Recovery Periods 13 Recovery Periods 14 Asset Class Descriptions of Assets Class Life GDS ADS 15 00.11 Office furniture and equipment 10 7 10 16 00.12 Information systems, including computers 5 17 17 00.22 00.23 Buses 00.241 00.24 Automobiles, taxis Light general purpose trucks 3 5 18 9 19 20 00.242 Heavy general purpose trucks 00.26 Tractor units for use over the road 01.1 Agriculture 10.0 Mining 13.2 Production of petroleum and natural gas 6 4 10 10 14 7 21 Print Done Print Done
A company purchased new mining equipment in year 2018 by paying $400,000 cash. The company plans to keep the equipment for several years and use MACRS-GDS depreciation for tax purposes. Click the icon to view the partial listing of depreciable assets used in business. Click the icon to view the GDS Recovery Rates (k). Calculate the depreciation that the company claimed on the asset for year 2 of ownership. OA. $48,980 OB. $34,980 OC. $17,840 O D. $69,960 ○ E. $97,960 Calculate the book value of the asset at the end of year 2. OA. $365,020 OB. $293,860 OC. $209,900 More Info O D. $244,880 O E. $174,920 C More Info GDS Recovery Rates (r) for the Six Personal Property Classes Recovery Period (and Property Class) Year 3-year 5-year 7-year³ 10-year² 15-yearb 20-yearb 1 0.3333 0.2000 0.1429 0.1000 0.0500 0.0375 2 0.4445 0.3200 0.2449 0.1800 0.0950 0.0722 3 0.1481 0.1920 0.1749 0.1440 0.0855 0.0668 4 0.0741 0.1152 0.1249 0.1152 0.0770 0.0618 0.1152 0.0893 0.0922 0.0693 0.0571 0.0576 0.0892 0.0737 0.0623 0.0528 0.0893 0.0655 0.0590 0.0489 0.0446 0.0655 0.0590 0.0452 0.0656 0.0591 0.0447 0.0655 0.0990 0.0590 0.0447 0.0328 0.0591 0.0440 0.0590 0.0446 0.0591 0.0446 0.0590 0.0446 0.0591 0.0446 0.0295 0.0446 0.0446 0.0446 0.0446 0.0446 0.0223 7 8 9 10 11 12 MACRS Class Lives and Recovery Periods 13 Recovery Periods 14 Asset Class Descriptions of Assets Class Life GDS ADS 15 00.11 Office furniture and equipment 10 7 10 16 00.12 Information systems, including computers 5 17 17 00.22 00.23 Buses 00.241 00.24 Automobiles, taxis Light general purpose trucks 3 5 18 9 19 20 00.242 Heavy general purpose trucks 00.26 Tractor units for use over the road 01.1 Agriculture 10.0 Mining 13.2 Production of petroleum and natural gas 6 4 10 10 14 7 21 Print Done Print Done
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Transcribed Image Text:A company purchased new mining equipment in year 2018 by paying $400,000 cash. The company plans to keep the equipment for several years and use MACRS-GDS depreciation for tax purposes.
Click the icon to view the partial listing of depreciable assets used in business.
Click the icon to view the GDS Recovery Rates (k).
Calculate the depreciation that the company claimed on the asset for year 2 of ownership.
OA. $48,980
OB. $34,980
OC. $17,840
O D. $69,960
○ E. $97,960
Calculate the book value of the asset at the end of year 2.
OA. $365,020
OB. $293,860
OC. $209,900
More Info
O D. $244,880
O E. $174,920
C
More Info
GDS Recovery Rates (r) for the Six Personal Property Classes
Recovery Period (and Property Class)
Year
3-year
5-year
7-year³
10-year²
15-yearb
20-yearb
1
0.3333
0.2000
0.1429
0.1000
0.0500
0.0375
2
0.4445
0.3200
0.2449
0.1800
0.0950
0.0722
3
0.1481
0.1920
0.1749
0.1440
0.0855
0.0668
4
0.0741
0.1152
0.1249
0.1152
0.0770
0.0618
0.1152
0.0893
0.0922
0.0693
0.0571
0.0576
0.0892
0.0737
0.0623
0.0528
0.0893
0.0655
0.0590
0.0489
0.0446
0.0655
0.0590
0.0452
0.0656
0.0591
0.0447
0.0655
0.0990
0.0590
0.0447
0.0328
0.0591
0.0440
0.0590
0.0446
0.0591
0.0446
0.0590
0.0446
0.0591
0.0446
0.0295
0.0446
0.0446
0.0446
0.0446
0.0446
0.0223
7
8
9
10
11
12
MACRS Class Lives and Recovery Periods
13
Recovery Periods
14
Asset Class
Descriptions of Assets
Class Life
GDS
ADS
15
00.11
Office furniture and equipment
10
7
10
16
00.12
Information systems, including computers
5
17
17
00.22
00.23
Buses
00.241
00.24
Automobiles, taxis
Light general purpose trucks
3
5
18
9
19
20
00.242
Heavy general purpose trucks
00.26
Tractor units for use over the road
01.1
Agriculture
10.0
Mining
13.2
Production of petroleum and natural gas
6
4
10
10
14
7
21
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