Question

A factory purchased a new computer and other
depreciable computer hardware for $12,000. During the third year, the computer is
declared obsolete and is donated to the local community. Assume that no
salvage was initially declared and that the machine was expected to last 5 years.

Prepare a table IN EXCEL with the depreciation schedules and book values for each
method:
              a) 100% bonus depreciation
b) MACRS depreciation

Answer 1

a) 100% bonus depreciation means, the depreciation amount for the first year = 12,000 * 100% = $12,000. So, book value will be $0.

b) Computer has recovery period of 5 years under MACRS depreciation. The depreciation schedule is given below.