Question

An asset fitting into the 7-year MACRS category was purchased two years ago for $125,000. The...

An asset fitting into the 7-year MACRS category was purchased two years ago for $125,000. The book value of this asset is now________. (Do not round intermediate calculations.)

Business   Accounting   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

Answer :-

In the question it was given that , An asset fitting into the 7-year MACRS category . Then the deprecation rate for year 1 is 14.29% and deprecation rate for year 2 is 24.49%.

Purchase price of Assets = $125,000

Deprecation for year 1 = Purchase price of assets × Deprecation rate for year 1

Deprecation for year 1 = $125,000 × 14.29% = $17,862.5

Deprecation for year 2 = Purchase price of assets × Deprecation rate for year 2

Deprecation for year 2 = $125,000 × 24.49% = 30,612.5

Book Value of Assets = Purchase price of Assets - Deprecation for year 1 - Deprecation for year 2

Book Value of Assets = $125,000 - $17,862.5 - $30,612.5

Book value of Assets = $76,525.

If you have any queries please comment I will solve the queries. Please give positive rating.

​​​​​

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
An asset was purchased three years ago for $110,000. It falls into the five-year category for...
An asset was purchased three years ago for $110,000. It falls into the five-year category for MACRS depreciation. The firm is in a 25 percent tax bracket. Use Table 12–12. a. Compute the tax loss on the sale and the related tax benefit if the asset is sold now for $14,060. (Input all amounts as positive values. Do not round intermediate calculations and round your answers to whole dollars.) b. Compute the gain and related tax on the sale if...
An asset was purchased three years ago for $155,000. It falls into the five-year category for...
An asset was purchased three years ago for $155,000. It falls into the five-year category for MACRS depreciation. The firm is in a 25 percent tax bracket. Use Table 12–12. a. Compute the tax loss on the sale and the related tax benefit if the asset is sold now for $18,560. (Input all amounts as positive values. Do not round intermediate calculations and round your answers to whole dollars.) b. Compute the gain and related tax on the sale if...
1/ Assume a corporation has earnings before depreciation and taxes of $105,000, depreciation of $45,000, and...
1/ Assume a corporation has earnings before depreciation and taxes of $105,000, depreciation of $45,000, and that it has a 35 percent tax bracket. What are the after-tax cash flows for the company? $87,800 $88,600 $78,800 $84,000 2/ The Wet Corp. has an investment project that will reduce expenses by $20,000 per year for 3 years. The project's cost is $30,000. If the asset is part of the 3-year MACRS category (33.33% first year depreciation) and the company's tax rate...
ABC Company purchased $96,171 of equipment 4 years ago. The equipment is 7-year MACRS property. The...
ABC Company purchased $96,171 of equipment 4 years ago. The equipment is 7-year MACRS property. The firm is selling this equipment today for $4,624. What is the After-tax Salvage Value if the tax rate is 35%? The MACRS allowance percentages are as follows, commencing with year one: 14.29, 24.49, 17.49, 12.49, 8.93, 8.92, 8.93, and 4.46 percent.
Oregon Forest Products will acquire new equipment that falls under the five-year MACRS category. The cost...
Oregon Forest Products will acquire new equipment that falls under the five-year MACRS category. The cost is $440,000. If the equipment is purchased, the following earnings before depreciation and taxes will be generated for the next six years. Use Table 12-12. Earnings before Depreciation Year 1 $ 125,000 Year 2 175,000 Year 3 120,000 Year 4 80,000 Year 5 71,000 Year 6 41,000 The firm is in a 25 percent tax bracket and has a 12 percent cost of capital....
An asset used in a four-year project falls in the five-year MACRS class (MACRS Table) for...
An asset used in a four-year project falls in the five-year MACRS class (MACRS Table) for tax purposes. The asset has an acquisition cost of $7,500,000 and will be sold for $1,740,000 at the end of the project. If the tax rate is 22 percent, what is the aftertax salvage value of the asset? (Do not round intermediate calculations and round your answer to the nearest whole number, e.g., 32.)
Oregon Forest Products will acquire new equipment that falls under the five-year MACRS category. The cost...
Oregon Forest Products will acquire new equipment that falls under the five-year MACRS category. The cost is $300,000. If the equipment is purchased, the following earnings before depreciation and taxes will be generated for the next six years. Use Table 12-12. Use Appendix B for an approximate answer but calculate your final answer using the formula and financial calculator methods. Earnings before Depreciation Year 1 $ 110,000 Year 2 120,000 Year 3 75,000 Year 4 50,000 Year 5 56,000 Year...
Oregon Forest Products will acquire new equipment that falls under the five-year MACRS category. The cost...
Oregon Forest Products will acquire new equipment that falls under the five-year MACRS category. The cost is $440,000. If the equipment is purchased, the following earnings before depreciation and taxes will be generated for the next six years. Use Table 12-12. Use Appendix B for an approximate answer but calculate your final answer using the formula and financial calculator methods. Earnings before Depreciation Year 1 $ 120,000 Year 2 190,000 Year 3 130,000 Year 4 71,000 Year 5 70,000 Year...
Oregon Forest Products will acquire new equipment that falls under the five-year MACRS category. The cost...
Oregon Forest Products will acquire new equipment that falls under the five-year MACRS category. The cost is $480,000. If the equipment is purchased, the following earnings before depreciation and taxes will be generated for the next six years. Use Table 12-12. Use Appendix B for an approximate answer but calculate your final answer using the formula and financial calculator methods. Earnings before Depreciation Year 1 $ 150,000 Year 2 190,000 Year 3 120,000 Year 4 86,000 Year 5 76,000 Year...
An asset used in a 4-year project falls in the 5-year MACRS class for tax purposes....
An asset used in a 4-year project falls in the 5-year MACRS class for tax purposes. The asset has an acquisition cost of $8,300,000 and will be sold for $1,960,000 at the end of the project. If the tax rate is 22 percent, what is the aftertax salvage value of the asset? Refer to (MACRS schedule) (Do not round intermediate calculations and enter your answer in dollars, not millions of dollars, rounded to the nearest whole number, e.g., 1,234,567)
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT