Situation: You have just purchased a new shaker table for your cement manufactur

Question

Situation: You have just purchased a new shaker table for your cement manufacturing company. You bought the shaker table new for $5,000 in January 2016. Salvage Value after two years is $3,000. Use the tables from IRS Publication 946 1. What is the asset class for this new equipment? 2. What is the MACRS recovery period (in years) using the General Depreciation System (GDS) from Table B-2? 3. What is the depreciation charge that can be claimed using the MACRS method in the year 2018 (after 2 years of ownership. t-2) using Table A-14? overy period as the depreciable life (N), what is the depreciation charge that can be claimed using the SOYD method in the year 2018 (after 2 years of ownership, t-2)? s. Which depreciation method (straight line, SOYD, double declining balance, and MACRS) gives the highest depreciation charge for 2018?

Explanation / Answer

a) Asset Class for the new equipment Staker Table is 00.11

SPECIFIC DEPRECIABLE ASSETS USED IN ALL BUSINESS ACTIVITIES, EXCEPT AS NOTED: 00.23 00.241 00.242 00.25 00.26 00.27 00.28 00.3 00.4 Office Furniture, Fixtures, and Equipment: Includes furniture and xtures that are not a structural component of a building. Includes such assets as desks, les, safes, and communications equipment. Does not include communications equipment that is included in other classes.

b) Macrs recovery period = 7 Years

c) 150% Declining Balance Method Half-Year Convention. 19.13%

d) Depreciation using SYOD method after using the asset for 2 years is 429 $

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