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The company treasurer is uncertain which depreciation method the firm should use for office furniture that...

The company treasurer is uncertain which depreciation method the firm should use for office furniture that costs $50,000 and has no salvage value at the end of its 10-year life. a) Compute the depreciation schedule for the office furniture using Straight Line depreciation with a 10-year depreciable life b) Compute the depreciation schedule using MACRS

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Expert Solution

Year SL MACRS MACRS%
1 $       5,000 $        7,145 14.29%
2 $       5,000 $      12,245 24.49%
3 $       5,000 $        8,745 17.49%
4 $       5,000 $        6,245 12.49%
5 $       5,000 $        4,465 8.93%
6 $       5,000 $        4,460 8.92%
7 $       5,000 $        4,465 8.93%
8 $       5,000 $        2,230 4.46%
9 $       5,000 $             -  
10 $       5,000 $             -  

Office furniture falls under 7-year MACRS schedule whose annual percentage are mentioned above.

In straight line, depreciation = 50,000 / 10 = 5,000

In MACRS, depreciation = 50,000 x MACRS %

jeff jeffy answered 1 year ago
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