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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.)

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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.

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