Johnson Industries purchased a metal-working lathe for $32,000. This item will be used for business 90% of the time. Accountants elected to take a $11,000 section 179 deduction and utilize the special depreciation allowance of 50%. Prepare a depreciation schedule (in $) using MACRS. Round all dollar amounts to the nearest cent. chart attached
Johnson Industries purchased a metal-working lathe for $32,000. This item will be used for business 90% of the time. Accountants elected to take a $11,000 section 179 deduction and utilize the special depreciation allowance of 50%. Prepare a depreciation schedule (in $) using MACRS. Round all dollar amounts to the nearest cent. chart attached
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Depreciation Methods
The word "depreciation" is defined as an accounting method wherein the cost of tangible assets is spread over its useful life and it usually denotes how much of the assets value has been used up. The depreciation is usually considered as an operating expense. The main reason behind depreciation includes wear and tear of the assets, obsolescence etc.
Depreciation Accounting
In terms of accounting, with the passage of time the value of a fixed asset (like machinery, plants, furniture etc.) goes down over a specific period of time is known as depreciation. Now, the question comes in your mind, why the value of the fixed asset reduces over time.
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Johnson Industries purchased a metal-working lathe for $32,000. This item will be used for business 90% of the time. Accountants elected to take a $11,000 section 179 deduction and utilize the special depreciation allowance of 50%.
Prepare a depreciation schedule (in $) using MACRS.
Round all dollar amounts to the nearest cent.
chart attached
Transcribed Image Text:Johnson Industries purchased a metal-working lathe for $32,000. This item will be used for business 90% of the time. Accountants elected
to take a $11,000 section 179 deduction and utilize the special depreciation allowance of 50%.
Prepare a depreciation schedule (in $) using MACRS.
Round all dollar amounts to the nearest cent.
Johnson Industries
MACRS Depreciation Schedule-Metal-working Lathe
Basis for
Depreciation
End of
MACRS Depreciation
Deduction
Recovery
Accumulated
Book Value
Year
Percent
Depreciation
1
33.33%
2
44.45%
%3!
14.81%
%3!
4
7.41%
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