Question

Olympus Equipment Company purchased a new piece of factory equipment on May 1, 2015, for $29,200....

Olympus Equipment Company purchased a new piece of factory equipment on May 1, 2015, for $29,200. For income tax purposes, the equipment is classified as a seven-year asset. Because this is similar to the economic life expected for the asset, Olympus decides to use the tax depreciation for financial reporting purposes. The equipment is not expected to have any residual value at the end of the seven years. Prepare a depreciation schedule for the life of the asset using the MACRS method of cost recovery.

Business   Accounting   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1
Total Cost $29,200.00
Recovery Period (in years) 7
Depreciation Schedule: MACRS Method
Year Rate Depreciation Accumulated Depreciation Book Value
0 $0.00 $0.00 $29,200.00
1 14.29% $4,173 $4,173 $25,027
2 24.49% $7,151 $11,324 $17,876
3 17.49% $5,107 $16,431 $12,769
4 12.49% $3,647 $20,078 $9,122
5 8.93% $2,608 $22,685 $6,515
6 8.92% $2,605 $25,290 $3,910
7 8.93% $2,608 $27,898 $1,302
8 4.46% $1,302 $29,200 $0
0 0
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
DEPRECIATION COMPUTATIONS ON JULY 1, 2015 DOLBY CORP PURCHASED SOME NEW EQUIPMENT TO BE USED IN...
DEPRECIATION COMPUTATIONS ON JULY 1, 2015 DOLBY CORP PURCHASED SOME NEW EQUIPMENT TO BE USED IN THEIR RECORDING STUDIO. THE EQUIPMENT COST $70,000 AND IT IS EXPECTED TO HAVE A SALVAGE VALUE OF $8,000 AFTER ITS USEFUL LIFE OF 6 YEARS. IT IS ESTIMATED THAT THE MACHINE WILL BE USED FOR 32,000 HOURS OF RECORDING OVER THE 6 YEARS. DOLBY USED THE EQUIPMENT FOR 8,000 HOURS AND 9,000 HOURS FOR THE YEARS 2015 AND 2016 RESPECTIVELY. MACRS (TAX) DEPRECIATION SPECIFIES...
At the beginning of 2015, your company buys a $33,200 piece of equipment that it expects...
At the beginning of 2015, your company buys a $33,200 piece of equipment that it expects to use for 4 years. The equipment has an estimated residual value of 4,000. The company expects to produce a total of 200,000 units. Actual production is as follows: 45,000 units in 2015, 53,000 units in 2016, 46,000 units in 2017, and 56,000 units in 2018. Required: a. Determine the depreciable cost. b. Calculate the depreciation expense per year under the straight-line method. c....
Suber Inc., a calendar year taxpayer, purchased equipment for $860,000 and placed it in service on...
Suber Inc., a calendar year taxpayer, purchased equipment for $860,000 and placed it in service on March 1. Suber’s chief engineer determined that the equipment had an estimated useful life of 120 months and a $56,000 residual value. For financial statement purposes, Suber uses the straight-line method to compute depreciation. a. Assuming that the equipment has a seven-year recovery period and is subject to the half-year convention, compute MACRS depreciation for the year.
Five Satins Company purchased a piece of equipment at the beginning of 2014. The equipment cost...
Five Satins Company purchased a piece of equipment at the beginning of 2014. The equipment cost $430,000. It has an estimated service life of 8 years and an expected salvage value of $70,000. The sum-of-the-years'-digits method of depreciation is being used. Someone has already correctly prepared a depreciation schedule for this asset. This schedule shows that $60,000 will be depreciated for a particular calendar year. Determine for what particular year the depreciation amount for this asset will be $60,000.
4. At the beginning of the fiscal year, G&J Company acquired new equipment at a cost...
4. At the beginning of the fiscal year, G&J Company acquired new equipment at a cost of $99,000. The equipment has an estimated life of five years and an estimated salvage value of $7,000. (a) Determine the annual depreciation (for financial reporting) for each of the five years of estimated useful life of the equipment, the accumulated depreciation at the end of each year, and the book value of the equipment at the end of each year by using (a.1)...
Hanson Company purchased a piece of equipment for $1,730,000 and placed it in operation on January...
Hanson Company purchased a piece of equipment for $1,730,000 and placed it in operation on January 1, 2016. Depreciation was recorded for 2016, 2017, and 2018 using the straight-line method, a 10-year life, and an expected residual value of $63,000. Based on the Hanson Company’s usage of the equipment through 2018, they believe that the useful life of the equipment will be longer than they had originally estimated. They have revised the estimated life of the equipment to be a...
2.   A piece of newly purchased industrial equipment costs $8,200,000, has a salvage value of $580,000...
2.   A piece of newly purchased industrial equipment costs $8,200,000, has a salvage value of $580,000 and is classified as a seven-year property under MACRS. Calculate the annual depreciation allowances and the end-of-year book values for this equipment. If       the equipment is sold for 40% of the initial cost in year 4, what is the after-tax cash flow from the sale if the tax rate is 21%?
On January 1, 2019, ABC Company purchased a new piece of equipment. The equipment was assigned...
On January 1, 2019, ABC Company purchased a new piece of equipment. The equipment was assigned a $7,000 residual value and is expected to produce a total of 60,000 units over its life. The depreciation expense reported on the equipment for 2019 was $10,734. During 2020, the equipment was used to produce 9,000 units. At December 31, 2020, the book value of the equipment was $57,466. ABC Company is using the units-of-production depreciation method to depreciate the equipment. Calculate the...
Assume that Sample Company purchased factory equipment on January 1, 2016, for $60,000. The equipment has...
Assume that Sample Company purchased factory equipment on January 1, 2016, for $60,000. The equipment has an estimated life of five years and an estimated residual value of $6,000. Sample’s accountant is considering whether to use the straight-line or the units-of-production method to depreciate the asset. Because the company is beginning a new production process, the equipment will be used to produce 10,000 units in 2016, but production subsequent to 2016 will increase by 10,000 units each year. Required: Calculate...
Alteran Corpration purchased office equipment for $2.2 million in 2015. The equipment is being depreciated over...
Alteran Corpration purchased office equipment for $2.2 million in 2015. The equipment is being depreciated over 8 year life using the sum of the years digits method. The residual value is expected to be $700000. At the end of 2018. Alteran decided to change to the straight line depreciation method for this equipment. Prepare the journal entry to record depreciation for 2018
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT