In your new position as head accountant (so OK - you\'re the only accountant but
ID: 2737221 • Letter: I
Question
In your new position as head accountant (so OK - you're the only accountant but it will sound better on your resume) at Frankenstein, Inc. (motto: "You just think they're dead!") you note that last month on July 2 , 2012 they bought "research equipment and certain special tools" for $60,000 (you don't want to know what they will do with those "special tools") anyway your job is to lower their corporate taxes if possible. You decide to use MACRS for depreciation How much can they take for these three years? (6 points) 2012, 2015, 2017.
Explanation / Answer
For special tools used in research their life is considered to be 5 years,
For this $60000 tool, the depreciation is followed in the following way:
2012
20% of $60000
$12000
2013
32% of $60000
$19200
2014
19.2% of $60000
$11520
2015
11.52% of $60000
$6912
2016
11.52% of $60000
$6912
2017
5.76% of $60000
$3456
2012
20% of $60000
$12000
2013
32% of $60000
$19200
2014
19.2% of $60000
$11520
2015
11.52% of $60000
$6912
2016
11.52% of $60000
$6912
2017
5.76% of $60000
$3456