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An income producing asset costing $160,000 is being depreciated using MACRS GDS. The salvage value of...

An income producing asset costing $160,000 is being depreciated using MACRS GDS. The salvage value of the asset is $8,000. The class life of the asset is 7 years. Calculate the book value of the asset at the end of year 5. ** Please show all steps please.

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Answer #1
Calculation Of MACRS Depreciation using Half Year convention
Year Basis Depreciation rate Depreciation Expenses
(Basis * Depreciation rate)		 Accumulated Depreciation
Nyears + (N-1)Years		 Closing balance
(Basis - Accumulated Depreciation)
1 160000 14.29% 22864 22864 137136
2 160000 24.49% 39184 62048 97952
3 160000 17.49% 27984 90032 69968
4 160000 12.50% 20000 110032 49968
5 160000 8.93% 14288 124320 35680

I have Used Half Year convention as the sum is silent about it. The closing bbok value of the asset after 5 year will be 35680.

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