A manufacturer of aerospace products purchased two flexible assembly cells for $460,000 each. Delivery and insurance...

A manufacturer of aerospace products purchased two flexible assembly cells for $460,000 each. Delivery and insurance charges were $30,000, and installation of the cells cost another $46,000.

If the cells are sold to another company for $140,000 each at the end of year seven, how much is the recaptured depreciation? PLEASE SHOW WORK.

To the person who said annual depreciation needs to be provided, I was not given that information so I cannot tell you.

Expert Solution

Purchase cost 920000
Insurance 30000
Installation 46000
Depreciable cost 996000
year (Dep @ 20% on WDV basis wdv at beginng wdv at the end
1 996000 796800
2 796800 637440
3 637440 509952
4 509952 407961.6
5 407961.6 326369.3
6 326369.3 261095.4
7 261095.4 208876.3
Depreciation @ 15 % for 7 years at WDV method 787123.7
WDv of assets 208876.3
Less: Sale of Asset 280000
Dep Recapture 71123.66

ekkarill92 answered 2 years ago

A manufacturer of aerospace products purchased three flexible assembly cells for $470,000 each. Delivery and insurance...

A manufacturer of aerospace products purchased three flexible assembly cells for $470,000 each. Delivery and insurance charges were $30,000? and installation of the cells cost another $53,000. a. Determine the cost basis of the three cells. b. What is the class life of the? cells? c. What is the MACRS depreciation in year seven?? d. If the cells are sold to another company for $100,000 each at the end of year six?, how much is the recaptured? depreciation?

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