Question

In: Finance

An automated inspection system purchased at a cost of $600,000 by ABC Engineering was depreciated using...

An automated inspection system purchased at a cost of $600,000 by ABC Engineering was depreciated using the MACRS method. The system was sold after 5 years for $150,000. The automated inspection system is a 7-year property according to MACRS GDS Property Class. Determine the accumulated depreciation of year 1, 2, 3, 4 and 5.

Solutions

Expert Solution

Year Accumulated depreciation
1               85,740
2           2,32,680
3           3,37,620
4           4,12,560
5           4,66,140
Working:
Depreciation Schedule:
Year Cost Depreciation rate Depreciation Expense Accumulated depreciation
1 $       6,00,000 14.29%          85,740      85,740
2 $       6,00,000 24.49%      1,46,940 2,32,680
3 $       6,00,000 17.49%      1,04,940 3,37,620
4 $       6,00,000 12.49%          74,940 4,12,560
5 $       6,00,000 8.93%          53,580 4,66,140

jeff jeffy answered 1 year ago
Next > < Previous

Related Solutions

An automated inspection system purchased at a cost of $200,000 by Mega Tech Engineering and has...
An automated inspection system purchased at a cost of $200,000 by Mega Tech Engineering and has a useful life of 7 years. The Salvage Value is expected to be zero. The system was sold after 4 years for $150,000. Determine the depreciation recapture on this equipment. Calculate the depreciation recapture using the following methods: A) SL B) SOYD C) MACRS Show full work with hand calculations as well as excel document showing how you calculated everything out so I can...
An automated inspection system purchased at a cost of $200,000 by Mega Tech Engineering and has...
An automated inspection system purchased at a cost of $200,000 by Mega Tech Engineering and has a useful life of 7 years. The Salvage Value is expected to be zero. The system was sold after 4 years for $150,000. Determine the depreciation recapture on this equipment. Calculate the depreciation recapture using the following methods: A) SL B) SOYD C) MACRS Show full work with hand calculations as well as excel document showing how you calculated everything out so I can...
The following information shows last year’s quality-related costs for the Madrigal Company: Quality engineering $600,000 Inspection...
The following information shows last year’s quality-related costs for the Madrigal Company: Quality engineering $600,000 Inspection of and testing of incoming materials 480,000 Warranty claims 2,814,000 Repair costs in the field 1,020,000 Product liability lawsuits 5,400,000 Statistical process control 300,000 Research of customer needs 90,000 Product recalls 2,400,000 Maintenance of test equipment 420,000 Waste 840,000 Returned products 1,440,000 Net cost of scrap 762,000 Rework costs 1,440,000 Product quality audits 570,000 Quality training 150,000 Downtime due to defects 150,000 Process control...
An equipment was purchased by a Company at the cost of $875,000. It was depreciated for...
An equipment was purchased by a Company at the cost of $875,000. It was depreciated for five years on a straight-line basis to zero-salvage value. The market value of this equipment is $85,000. Tax rate applicable to this Company is 40%. Calculate the After-tax Salvage value. a. 585.000 b. 5121,000 c. 590,000 d. 551,000
Existing machine was purchased 2 years ago at a cost of $3,200. It is being depreciated...
Existing machine was purchased 2 years ago at a cost of $3,200. It is being depreciated straight line over its 8 year life. It can be sold now for $3,000 or used for 6 more years at which time it will be sold for an estimated $500. It provides revenue of $5,000 annually and cash operating costs of $2,000 annually. A replacement machine can be purchased now for $7,800. It would be used for 6 years, and depreciated straight line....
The truck was purchased on January 1, 2018 for $100,000 and is depreciated using the double-declining...
The truck was purchased on January 1, 2018 for $100,000 and is depreciated using the double-declining balance method. The truck has a salvage value of $10,000 and an estimated useful life of five years. On December 31, sold truck for $30,000 cash. Hint: Two years (2018 and 2019) of depreciation expense have been recorded and the total depreciation for the two-year period is in accumulated depreciation immediately before the sale of the truck. Please let me know what the debit...
The truck was purchased on January 1, 2018 for $100,000 and is depreciated using the double-declining...
The truck was purchased on January 1, 2018 for $100,000 and is depreciated using the double-declining balance method. The truck has a salvage value of $10,000 and an estimated useful life of five years. On December 31, sold truck for $30,000 cash. Hint: Two years (2018 and 2019) of depreciation expense have been recorded and the total depreciation for the two-year period is in accumulated depreciation immediately before the sale of the truck. Please let me know what the debit...
An asset was purchased during 2010 for P 4800. It is being depreciated using the straight...
An asset was purchased during 2010 for P 4800. It is being depreciated using the straight line method for an estimated total life of 20 years and a salvage value of P 800. What is the difference in its current book value that would have resulted if the declining balance depreciation at the rate of 10% had been used? Topic: Depreciation Subject: Engineering Economy
Larkspur Company purchased a computer system for $78,300 on January 1, 2019. It was depreciated based...
Larkspur Company purchased a computer system for $78,300 on January 1, 2019. It was depreciated based on a 8-year life and an $17,900 salvage value. On January 1, 2021, Larkspur revised these estimates to a total useful life of 4 years and a salvage value of $10,200. Larkspur uses straight-line depreciation. Prepare Larkspur’s entry to record 2021 depreciation expense. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No...
Bramble Company purchased a computer system for $73,400 on January 1, 2019. It was depreciated based...
Bramble Company purchased a computer system for $73,400 on January 1, 2019. It was depreciated based on a 7-year life and an $19,500 salvage value. On January 1, 2021, Bramble revised these estimates to a total useful life of 4 years and a salvage value of $10,500. Bramble uses straight-line depreciation. Prepare Bramble’s entry to record 2021 depreciation expense. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No...
ADVERTISEMENT
Subjects
ADVERTISEMENT
Latest Questions
ADVERTISEMENT