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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.

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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 2 years ago
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