Book valueFind the book value for the asset shown in the accompanying table, ass
ID: 2794686 • Letter: B
Question
Book valueFind the book value for the asset shown in the accompanying table, assuming that MACRS depreciation is being used
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Asset
Installed cost
Recovery
period
(years)
Elapsed time
since purchase
(years)
A
$932,000
5
2
Click on the icon located on the top-right corner of the data table below in order to copy its contents into a spreadsheet.)
Rounded Depreciation Percentages by Recovery Year Using MACRS for
First Four Property Classes
Percentage by recovery year*
Recovery year
3 years
5 years
7 years
10 years
1
33%
20%
14%
10%
2
45%
32%
25%
18%
3
15%
19%
18%
14%
4
7%
12%
12%
12%
5
12%
9%
9%
6
5%
9%
8%
7
9%
7%
8
4%
6%
9
6%
10
6%
11
4%
Totals
100%
100%
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 convention.
Asset
Installed cost
Recovery
period
(years)
Elapsed time
since purchase
(years)
A
$932,000
5
2
Explanation / Answer
The current book value can be calculated using following details'
Life of equipment = 5 years
Remaining life = 5-2 = 3 years
So, accumulated depreciation during the first 2 years as per the MACRS table: = (0.2+0 32)*932000 = 484,640
Remaining book value = 932000-484640 = 447360