Problem 12-26 MACRS depreciation categories [L04] Assume $65,000 is going to be

Question

Problem 12-26 MACRS depreciation categories [L04] Assume $65,000 is going to be invested in each of the following assets. Using Table 12-11 and Table 12-12, indicate the dollar amount of the first year's depreciation Input variables: Investment amount a. Office furniture-7 year b.Automobile-5 year c.Electric and gas utility -20 year d. Sewage treatment-15 year $65,000 143 200 038 050 Solution and Explanation: Office furniture b. Automobile C. Electric and gas utility property d. Sewage treatment plant

Explanation / Answer

Depreciation Amount = Asset Value x Depreciation Rate

A). Office Furniture = $65,000 x 0.143 = $9,295

B). Automobile = $65,000 x 0.200 = $13,000

C). Electric and gas utility property = $65,000 x 0.038 = $2,470

D). Sewage treatment plant = $65,000 x 0.50 = $3,250

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