On January 1, 2020, Bonita Industries purchased a machine costing $358000. The machine is in the MACRS 5-year recovery class for tax purposes and has an estimated $67000 salvage value at the end of its economic life. It's based on half year convention. Assuming the company uses the general MACRS approach, the amount of MACRS deduction for tax purposes for the year 2020 is MACRS Depreciation Rates by Class of Property Recovery 3-year (200% DB) S-year (200% DB) 7-year 10-year (2006 DB) 15-year (150% DB) 20-year Year (200% DB) (150% DB) 14.29 24.49 17.49 12.49 33.33 20.00 10.00 5.00 3.750 44.45 32.00 18.00 9.50 7.219 14.81 19.20 14.40 8.55 7.70 6.677 11.52 11.52 11.52 9.22 4.. 7.41 6.177 8.93 6.93 5.713 6.23 5.90 5.285 4.888 5.76 8.92 8.93 7.37 6.55 6.... 5.90 5.91 . 4.46 6.55 4.522 6.56 6.55 4.462 4.461 4.462 10 5.90 11 3.28 5.91 .... .. 12 5.90 4.461 13 5.91 4.462 14 5.90 4.461 15 5.91 4.462 16 2.95 4.461 17 4.462 18 4.461 19 4.462 20 4.461 21 2.231 ..... *Switchover to stralght-ine depreciation.

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Chapter1: Financial Statements And Business Decisions
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On January 1, 2020, Bonita Industries purchased a machine costing $358000. The machine is in the MACRS 5-year recovery class
for tax purposes and has an estimated $67000 salvage value at the end of its economic life. It's based on half year convention.
Assuming the company uses the general MACRS approach, the amount of MACRS deduction for tax purposes for the year 2020 is
MACRS Depreciation Rates by Class of Property
3-year
(200% DB)
7-year
(200% DB)
15-year
(150% DB)
20-year
(150% DB)
Recovery
5-year
(200% DB)
10-year
(200% DB)
Year
1
33.33
20.00
14.29
10.00
5.00
3.750
2.
44.45
32.00
24.49
18.00
9.50
7.219
14.81*
19.20
17.49
14.40
8.55
6.677
11.52*
11.52
12.49
8.93*
4......... 7.41
11.52
7.70
6.177
5
9.22
6.93
5.713
6....
5.76
8.92
7.37
6.23
5.285
8.93
6.55*
5.90*
4.888
8.
4.46
6.55
5.90
4.522
6.56
5.91
4.462
10
6.55
5.90
4.461
11
3.28
5.91
4.462
12
5.90
4.461
13
5.91
4.462
14
5.90
4.461
15
5.91
4.462
16
2.95
4.461
17
4.462
18
4.461
19
4.462
20
4.461
21
2.231
*switchover to stralght-line depreclation.
O $71600.
O $114560.
O $143200.
O $58200.
Transcribed Image Text:On January 1, 2020, Bonita Industries purchased a machine costing $358000. The machine is in the MACRS 5-year recovery class for tax purposes and has an estimated $67000 salvage value at the end of its economic life. It's based on half year convention. Assuming the company uses the general MACRS approach, the amount of MACRS deduction for tax purposes for the year 2020 is MACRS Depreciation Rates by Class of Property 3-year (200% DB) 7-year (200% DB) 15-year (150% DB) 20-year (150% DB) Recovery 5-year (200% DB) 10-year (200% DB) Year 1 33.33 20.00 14.29 10.00 5.00 3.750 2. 44.45 32.00 24.49 18.00 9.50 7.219 14.81* 19.20 17.49 14.40 8.55 6.677 11.52* 11.52 12.49 8.93* 4......... 7.41 11.52 7.70 6.177 5 9.22 6.93 5.713 6.... 5.76 8.92 7.37 6.23 5.285 8.93 6.55* 5.90* 4.888 8. 4.46 6.55 5.90 4.522 6.56 5.91 4.462 10 6.55 5.90 4.461 11 3.28 5.91 4.462 12 5.90 4.461 13 5.91 4.462 14 5.90 4.461 15 5.91 4.462 16 2.95 4.461 17 4.462 18 4.461 19 4.462 20 4.461 21 2.231 *switchover to stralght-line depreclation. O $71600. O $114560. O $143200. O $58200.
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Section 179 Deduction and Modified Accelerated Cost Recovery System (MACRS) Depreciation
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