The world’s Largest Sharp Brain Virtual Experts Marketplace Just a click Away
Levels Tought:
Elementary,Middle School,High School,College,University,PHD
| Teaching Since: | May 2017 |
| Last Sign in: | 408 Weeks Ago, 1 Day Ago |
| Questions Answered: | 66690 |
| Tutorials Posted: | 66688 |
MCS,PHD
Argosy University/ Phoniex University/
Nov-2005 - Oct-2011
Professor
Phoniex University
Oct-2001 - Nov-2016
Hudson Industries, a small electronics company, 2 years ago acquired a machine tool with an installed cost of $100,000. The asset was being depreciated under MACRS using a 5-year recovery period.4Â Table 3.2 (page 100) shows that under MACRS for a 5-year recovery period, 20% and 32% of the installed cost would be depreciated in years 1 and 2, respectively. In other words, 52% (20% + 32%) of the $100,000 cost, or $52,000 (0.52 x $100,000), would represent the accumulated depreciation at the end of year 2. Substituting into Equation 8.1, we get
 Book value = $100,000-$52,000 = $48,000
The book value of Hudson’s asset at the end of year 2 is therefore $48,000.
|
TABLE 3.2 |
||||
|
Rounded Depreciation Percentages by Recovery Year Using MACRS for First Four Property Classes |
||||
|
 |
Percentage by recovery yeara |
|||
|
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% |
Equation 8.1
Book value= Installed cost of asset - Accumulated depreciation (8.1)
Hel-----------lo -----------Sir-----------/Ma-----------dam-----------Tha-----------nk -----------You----------- fo-----------r u-----------sin-----------g o-----------ur -----------web-----------sit-----------e a-----------nd -----------acq-----------uis-----------iti-----------on -----------of -----------my -----------pos-----------ted----------- so-----------lut-----------ion-----------.Pl-----------eas-----------e p-----------ing----------- me----------- on-----------cha-----------t I----------- am----------- on-----------lin-----------e o-----------r i-----------nbo-----------x m-----------e a----------- me-----------ssa-----------ge -----------I w-----------ill----------- be-----------