Equipment has been purchased and put into service for a
$2,000,000 cost. Calculate the MACRS depreciation (200% declining
balance switching to straight line), and straight line depression
per year, for a 7-year depreciation life, with the half year 1
convention applicable for both methods, assuming the equipment is
put in service in year 1.
(Work it in excel if possible, thank you)
Since there is no salvage value,
Depreciable ampunt = 2,000,000
Number of years = 7
Per year depreciation = 2,000,000/7 = $285714.28
Since, halfyear 1 convention is applicable, only half of this will be accounted for in the first year and the remaining half shall be accounted for in the 8th year.
Hence, the schedule is as follows:
Year 1: $142857.14
Year 2: $285714.28
Year 3: $285714.28
Year 4: $285714.28
Year 5: $285714.28
Year 6: $285714.28
Year 7: $285714.28
Year 8: $142857.14
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