Please help! Number 4 Number 5 HW Score: 10%, 10 of 100 pts 4 of 10 (1 complete)

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Please help!

Number 4

Number 5

HW Score: 10%, 10 of 100 pts 4 of 10 (1 complete) Score: 0 of 10 pts Question Help P11-15 (similar to) Depreciation A firm is evaluating the acquisition of an asset that costs $69,200 and requires $3,740 in installation costs. If the firm depreciates the asset under MACRS, using a 5-year recovery period (see table), determine the depreciation charge for each year. (Round to the nearest dollar.) Data Table The annual depreciation expense for year 1 will bes Percentage by recovery year* 5 years 20% 32% 19% 12% 12% 5% 7 years 14% 25% 18% 12% 3% 3% 3% A% 10 years 10% 18% 14% 12% 3% 8% years 3'3% 45% 15% Re ar 8% 8% 8% 4% 10 Ente r your answer in the answer box Totals remaining These percentages have been rounded to the nearest whole percent to simplify calculations while

Explanation / Answer

Ans P11-15) Cost of Assets $                           69,200.00 Installation Cost $                              3,740.00 Total Cost of Assets $                           72,940.00 The Annual depreciation expense for year 1= (Total cost of assets* Macrs 5 year recovery period rate at year 1) ($72940*20%) $                           14,588.00 Ans P11-22) Cost of New Machine $                         200,000.00 Installation Cost $                           29,000.00 Total Cost of new machine $                         229,000.00 Calculation of MACRS Depreciation on New Machine Year Cost Depreciation Expense WDV 1 $                                                                                                             229,000.00 $229000*20%=$45800 $ 183,200.00 2 $                                                                                                             183,200.00 229000*32%=73280 $ 109,920.00 3 $                                                                                                             109,920.00 229000*19%=$43510 $    66,410.00 4 $                                                                                                                66,410.00 229000*12%=$27480 $    38,930.00 Gain on Sale of New Machine= Sale Value $                           79,000.00 Less:WDV $                           38,930.00 Gain on Sale of New Machine= $                           40,070.00 Tax on Gain on sale of new machine=($40070*40%) $                           16,028.00 Book Value at the end of year 4 of old machine= $                                           -   Sale Value of Old Machine $                           15,000.00 Gain on sale of old machine $                           15,000.00 Tax on Gain on sale of old machine=($15000*40%) $                              6,000.00 Terminal Cash Flow Proceeds from sale of new machine $                           79,000.00 Tax on Sale of new machine $                           16,028.00 Total after tax proceeds -new assets=($79000-$16028) $    62,972.00 Proceeds on Sale of Old machine $                         (15,000.00) Tax on Sale of Old machine $                              6,000.00 Total after tax proceeds -Old assets $    (9,000.00) Change in net working Capital $    24,000.00 Terminal Cash Flow $    77,972.00

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