Book value Find the book value for the asset shown in the accompanying table, as
ID: 2794321 • Letter: B
Question
Book value Find the book value for the asset shown in the accompanying table, assuming that MACRS depreciation is being used Recovery period (years) Elapsed time since purchase (years) Data Table Asset Installed cost S809,000 (Click on the icon located on the top-right corner of the data table below in order to copy its contents into a spreadsheet) The remaining book value is (Round to the nearest dollar) Rounded Depreciation Percentages by Recovery Year Using MACRS for First Four Property Classes Percentage by recovery year* 5 years 20% 32% 1996 12% 12% 5% 7 years 14% 25% 18% 12% 9% 9% 9% 4% 10 years 10% 18% 14% 12% 9% 8% 7% 6% 6% 6% 3 years 33% 45% 15% 7% Recovery year 10 100% 100% Totals 100% 100% These percentages have been rounded to the nearest whole percent to simplify calculations while retaining realism. To calculate the actual depreciation for tax purposes, be sure to apply the actual unrounded percentages or directly apply double-declining balance (200%) depreciation using the half-year Enter your answer in the answer box.Explanation / Answer
Installment Cost = $809,000
Company use five year MACRS depreciation and use machine for four year in Operation.
Total Percentage depreciation in first 4 year = 20% + 32% + 19% + 12%
= 83%
So, at end of year 4, the equipment has 83% depreciated.
So book value at end of year 4 = $809,000 × (1 - 83%)
= $137,530.
Book Value of equipment at end of year 4 will be $137,530.