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 salvagevalue of $250,000.Part aWhat is the MACRS-GDS property class? 20-Year Property VShow Transcribed Text0Determine the depreciation deduction and the unrecovered investment during each of the first 4 tax years.ΕΟΥ Depreciation Deduction Unrecovered Investment1Your answer is correct.234$$$$$$$3$

MACRS-GDS stands for "Modified Accelerated Cost Recovery System - General Depreciation System." It…

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 Show Transcribed Text 0 Your answer is correct. Determine the depreciation deduction and the unrecovered investment during each of the first 4 tax years. EOY Depreciation Deduction Unrecovered Investment 1 2 3 EA 19 tA 4 $ tA 19 $ tA $ 3 EA

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 Show Transcribed Text 0 Your answer is correct. Determine the depreciation deduction and the unrecovered investment during each of the first 4 tax years. EOY Depreciation Deduction Unrecovered Investment 1 2 3 EA 19 tA 4 $ tA 19 $ tA $ 3 EA

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Electric generating and transmission equigment is placed in service at a cost of $3,250,000. It is expected to last 30 years with a salvage value of $250,000. Click here to access the MACRS-GDS Property Classes Part a Your answer is correct What is the MACRS-GDS property class? 20-Year Property Attempts: 1 of 3 used Part b Determine the depreciation deduction and the unrecovered investment during each of the first 4 tax years. Unrecovered Investment EOY Depreciation Deduction %24 2 3 4. Carry all Interim calculations to 5 decimal places and then round your final answer to the nearest dollar. The tolerance is 100. %24
Two investments involving a granary qualify for different property classes.Investment A costs $70,000 with $3,000 salvage value after 16 years and is depreciated as MACRS-GDS in the 10-year property class. Investment B costs $110,000 with a $4,000 salvage value after 16 years and is in the MACRS-GDS 5-year property class. Operation and maintenance for each is expected to be $18,000 and $14,000 per year, respectively. The income-tax rate is 25%, and MARR is 9% after taxes. a. Determine which alternative is less costly, based upon comparison of after-tax annual worth. b. What must the cost of the second (more expensive) investment be for there to be noeconomic advantage between the two?
Verify the 5- and 7-year property class percentages byapplying the 200% DB approach to a piece of equipmentwith a nominal value of $1,000. For the 7-year propertyclass, in what year is the switch from 200% DB to StraightLine? Only half of the first and last years are considered inthe computations. This means that for a 5-year class property,instead of deducting 100% × (2/5) = 40% in the firstyear, only half (40%/2 = 20%) is deducted.
Jake the Dog Inc. is investing in a new portable iguana killing machine that will cot 1pts $210,000. The machine has a useful life of 6 years and falls into the 5-year property class for the depreciation purposes. The IRS MACRS schedule for the six years is () 20%, (2) 32%, (3) 19.2 % ( 4 ) 115256, (5) 1152 %, (6)5.7653%.It will generate $50000 per Time R Aberdt year of savings for Jake and can be sold for $50,000 at the end of the 6-year period Jake's corporate tax rate is 32% In addition, Jake has 2000 outstanding 9% annual 45 Min 24/7P Coupon bonds with a $ 1000 oar value, 20 years to maturity and a price of $1085 Jalke also has 80,000 sráres of semmon stock outstanding that is selling for $45 per share This stock has a teta di 225(lis Jakel heis arisky dog-dude!), the expected market return is 1295 and the fisk-free rate ls 5% Finally, Jake has 36,000 shares preferred stock outstanding that pays a 3.5% dividend and sells for $40 per share. Using the WACC and the OCF's what…
7. A machine is purchased for $400,000. The machine is classified as MACRS 5-year property. The machine's useful life is 10 years. The estimated salvage value at the end of 10 years is $40,000. Using MACRS depreciation, compute the book value at the end of the third year.
A project requires $16,412 of equipment that is classified as a 7-year property. What is the depreciation expense in Year 5 given the following MACRS depreciation allowances, starting with year one: 14.29, 24.49, 17.49, 12.49, 8.93, 8.92, 8.93, and 4.46 percent? Enter your answer rounded off to two decimal points. Do not enter $ or comma in the answer box.
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.
am Warren Company plans to depreciate a new building using the double declining balance depreciation method. The building cost is $780,000. The estimated residual value of the building is $48,000 and it has an expected useful life of 25 years. What is the building's book value at the end of the first year? Grew H Multiple Choice O $717,600 $62,400 $31,200 $33.850 < Prev
Find the depreciation for the third year using MACRS cost-recovery rates for the property placed in service at midyear. The property is a 3-year property and was purchased for $98,452. Click the icon to view a table of MACRS rates. X The depreciation is $. (Round to the nearest cent as needed.) MACRS Table Year 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 3-Year 33.33% 44.45 14.81 7.41 Depreciation rate for recovery perioa 5-Year 7-Year 10-Year 15-Year 20.00% 10.00% 5.00% 14.29% 32.00 19.20 11.52 11.52 5.76 24.49 17.49 12.49 8.93 8.92 8.93 4.46 18.00 14.40 11.52 9.22 7.37 6.55 6.55 6.56 6.55 3.28 9.50 8.55 7.70 6.93 6.23 5.90 5.90 5.91 5.90 5.91 5.90 5.91 5.90 5.91 2.95 20-Year 3.750% 7.219 6.677 6.177 5.713 5.285 4.888 4.522 4.462 4.461 4.462 4.461 4.462 4.461 4.462 4.461 4.462 4.461 4.462 4.461
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 $
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
A company purchases new cement manufacturing assets that cost $15 million. This is classified in the 15-year property class using MACRS-GDS. What would be the depreciation allowance and book value at the end of years 1 and 3 using MARS with 50% bonus depreciation? a) Depreciation allowance at the end of year 1: b) Book value at the end of year 3 c)Depreciation allowance at the end of year 1: d) Book value at the end of year 3