An asset has a cost of $100,000. It is to be depreciated using 3-year MACRS depreciation rates. The life of the asset is 3 years. The asset can be sold for $5,000 at the end of its life. Calculate the amount of profit or loss on the sale of the asset. A. Loss of $4,000 B. Loss of $2,410 C. Profit of $5,000 D. Profit of $2,410

An asset has a cost of $100,000. It is to be depreciated using 3-year MACRS depreciation rates. The life of the asset is 3 years. The asset can be sold for $5,000 at the end of its life. Calculate the amount of profit or loss on the sale of the asset. A. Loss of $4,000 B. Loss of $2,410 C. Profit of $5,000 D. Profit of $2,410

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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1e. An asset is purchased for $90,000. It is expected to have a useful life of six years and a salvage value of $18,000 at the end of its useful life. Find the depreciation amount in the second year using MACRS-GDS with a recovery period of seven years.
the cost of a certain asset is 500000. its life is 10 years with a scrap value of 50000.using the declining baance method find the total depreciation after 5 years
Given a cost of a depreciable fixed asset of $24,000 with a salvage value of $2,000 and a life of 5 years, what is the annual depreciation of the fixed asset using the straight-line method? What would be the depreciation in the second year if it used the declining balance method at double the straight-line rate? In regards to question #1, if the company used the straight-line method and sold the asset after 4 years for $7,000, what would be the journal entry needed to record the transaction? What if they sold it for $5,000?
I am using MACRS for depreciation. Purchase date: September 1st Cost: $650,000 Salvage: $30,000 Life: 7 years What percent do I use to calculate depreciation for years 1-8?
Using the following data, solve for the depreciation and book value and prepare tabulation of book value using a) Straight Line Method, b) Sinking Fund Method, c) Declining Balance Method First cost = ₱10,000 Salvage Value = ₱500 Life of Property = 5 years Number of Years = 3 years For sinking fund method, assume 10% interest rate.
Alpha purchased delivery equipment amounting to P100,000 and plans to sell the asset for P10,000 at the end of 5 years. How much is the annual depreciation
An equipment costing P220,000 has an estimated life of 14 years with a book value of P30,000 at the end of the period. Compute the depreciation charge and its book value after 10 years using: a. straight-line method b. sinking fund method c. declining balance method d. sum of year's digit method
A building was purchased for $68,000. The asset has an expected service life of eight years and depreciation expense each year is $5,000 using the straight-line method. What is the residual value of the building? Multiple Choice $0 $28,000 $8,500 $13,500
Consider a 5-year MACRS asset, which was purchased at $140,000. The asset was disposed of at end of year 5 with a salvage value of $50,000. What is amount of gain(or loss) when asset is disposed of ? O $33,872 O $11,280 O $17,744 O $16,128
A machine costs $20,000. The machine can be disposed of after 2 years for $10,000. What is the ordinary gain using the following depreciation methods? 100% bonus depreciation. 5-year MACRS. 150% declining balance with N=5 years
A machine was purchased for 100,000 and has a salvage value of 20,000 what is the total depreciation on the 7th year if the economic life is 10 years? Assume i = 8% Use sinking fund method
An asset with a purchase price of $501,013 falls in the 3-year MACRS asset class. The asset will be sold at the end of a three year project for $180,745. What is the book value of the asset at the end of the project? Round your answer to the nearest dollar. Year Depreciable Allowance 1 33% 2 45 3 15 4 7

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