On January 1, 2025, Pharoah Company purchased a machine costing $356000. The machine is in the MACRS 5-year recovery class for tax purposes and has an estimated $71000 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
On January 1, 2025, Pharoah Company purchased a machine costing $356000. The machine is in the MACRS 5-year recovery class for tax purposes and has an estimated $71000 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
Chapter11: Long-term Assets
Section: Chapter Questions
Problem 8PA: Referring to PA7 where Kenzie Company purchased a 3-D printer for $450,000, consider how the...
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![On January 1, 2025, Pharoah Company purchased a machine costing $356000. The machine is in the MACRS 5-year recovery
class for tax purposes and has an estimated $71000 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
Year
1
2
3
4
5
6
7
8
9
10
11
12
13
14
MACRS Depreciation Rates By Class of Property
10-Year
(200% DB)
3-Year 5-Year 7-Year
(200% DB) (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
10.00
18.00
14.40
11.52
9.22
7.37
6.55*
6.55
6.56
6.55
3.28
15-Year
(150% DB)
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
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
SUPPORT](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F0f20cc49-c768-43e6-a9c4-6f0d40e2f4fd%2Ff8308f21-dcd8-4dbe-87a2-b8b6a53b5cdb%2Fgoc4s9v_processed.png&w=3840&q=75)
Transcribed Image Text:On January 1, 2025, Pharoah Company purchased a machine costing $356000. The machine is in the MACRS 5-year recovery
class for tax purposes and has an estimated $71000 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
Year
1
2
3
4
5
6
7
8
9
10
11
12
13
14
MACRS Depreciation Rates By Class of Property
10-Year
(200% DB)
3-Year 5-Year 7-Year
(200% DB) (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
10.00
18.00
14.40
11.52
9.22
7.37
6.55*
6.55
6.56
6.55
3.28
15-Year
(150% DB)
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
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
SUPPORT
![O $71200.
O $142400.
O $113920.
O $57000.
*Switch to straight-line depreciation.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F0f20cc49-c768-43e6-a9c4-6f0d40e2f4fd%2Ff8308f21-dcd8-4dbe-87a2-b8b6a53b5cdb%2F0rhrls_processed.png&w=3840&q=75)
Transcribed Image Text:O $71200.
O $142400.
O $113920.
O $57000.
*Switch to straight-line depreciation.
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