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On January 1, 2025, Ivanhoe Company purchased a machine costing $343000. The machine is in the MACRS 5-year recovery class for tax purposes and has an estimated $66000 salvage value at the end of its economic life. Assuming the company uses the general MACRS approach, the MACRS deduction for tax purposes for the year 2025 is Recovery 3-Year Year 1 2 3 4 5 6 7 8 9 10 11 12 13 14 MACRS Depreciation Rates By Class of Property 7-Year (200% DB) 15 5-Year (200% DB) (200% DB) 33.33 44.45 14.81° 7.41 20.00 32.00 19.20 11.52° 5.76 14.29 24.49 17.49 12.49 8.93° 8.92 8.93 4.46 15-Year 10-Year (200% DB) (150% DB) 10.00 18.00 14.40 11.52 9.22 7.37 6.55° 6.55 6.56 6.55 3.28 5.00 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 20-Year (150% DB) 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

On January 1, 2025, Ivanhoe Company purchased a machine costing $343000. The machine is in the MACRS 5-year recovery class for tax purposes and has an estimated $66000 salvage value at the end of its economic life. Assuming the company uses the general MACRS approach, the MACRS deduction for tax purposes for the year 2025 is Recovery 3-Year Year 1 2 3 4 5 6 7 8 9 10 11 12 13 14 MACRS Depreciation Rates By Class of Property 7-Year (200% DB) 15 5-Year (200% DB) (200% DB) 33.33 44.45 14.81° 7.41 20.00 32.00 19.20 11.52° 5.76 14.29 24.49 17.49 12.49 8.93° 8.92 8.93 4.46 15-Year 10-Year (200% DB) (150% DB) 10.00 18.00 14.40 11.52 9.22 7.37 6.55° 6.55 6.56 6.55 3.28 5.00 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 20-Year (150% DB) 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

FINANCIAL ACCOUNTING
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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On January 1, 2025, Ivanhoe Company purchased a machine costing $343000. The machine is in the MACRS 5-year recovery class for tax purposes and has an estimated $66000 salvage value at the end of its economic life. Assuming the company uses the general MACRS approach, the MACRS deduction for tax purposes for the year 2025 is Recovery 3-Year Year (200% DB) 1 2 3 4 5 6 7 8 9 10 11 12 13 14 MACRS Depreciation Rates By Class of Property 5-Year 7-Year (200% DB) (200% DB) 15 33.33 44.45 14.81 7.41 20.00 32.00 19.20 11.52* 5.76 14.29 24.49 17.49 12.49 8.93* 8.92 8.93 4.46 10-Year 15-Year (200% DB) (150% DB) 10.00 18.00 14.40 11.52 9.22 7.37 6.55* 6.55 6.56 6.55 3.28 5.00 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 20-Year (150% DB) 3.750 7.219 6.677 6.177 5.713 5.285 888 4.522 4.462* 4.461 4.462 4.461 4.462 4.461 4.462
Transcribed Image Text:On January 1, 2025, Ivanhoe Company purchased a machine costing $343000. The machine is in the MACRS 5-year recovery class for tax purposes and has an estimated $66000 salvage value at the end of its economic life. Assuming the company uses the general MACRS approach, the MACRS deduction for tax purposes for the year 2025 is Recovery 3-Year Year (200% DB) 1 2 3 4 5 6 7 8 9 10 11 12 13 14 MACRS Depreciation Rates By Class of Property 5-Year 7-Year (200% DB) (200% DB) 15 33.33 44.45 14.81 7.41 20.00 32.00 19.20 11.52* 5.76 14.29 24.49 17.49 12.49 8.93* 8.92 8.93 4.46 10-Year 15-Year (200% DB) (150% DB) 10.00 18.00 14.40 11.52 9.22 7.37 6.55* 6.55 6.56 6.55 3.28 5.00 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 20-Year (150% DB) 3.750 7.219 6.677 6.177 5.713 5.285 888 4.522 4.462* 4.461 4.462 4.461 4.462 4.461 4.462
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Section 179 Deduction and Modified Accelerated Cost Recovery System (MACRS) Depreciation
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