A company buys new office furniture for $75,000 with a 7-year depreciable life and a $5,000 Salvage Value. Use the following depreciation methods to determine the depreciation schedule (dt) and the office furniture's book value at the end of year 5. It is not being sold in year 5.
a. Straight Line
b. Sum-of-Years'- Digits (SOYD-Method)
c. Double declining balance (DDB-Method), assume any remaining depreciation is claimed in the last year.
d. MACRS depreciation, where the Salvage Value is zero.
The Company described in problem 1 is selling the office furniture after 3 years for $40,000.
a) Determine the MACRS depreciation schedule for 3 years of ownership
b) Determine any extra taxable income (recaptured depreciation), if any, on the sale of the furniture.
A company buys new office furniture for $75,000 with a 7-year depreciable life and a $5,000 Salvage Value. Use the following depreciation methods to determine the depreciation schedule (dt) and the office furniture's book value at the end of year 5. It is not being sold in year 5.
a. Straight Line
b. Sum-of-Years'- Digits (SOYD-Method)
c. Double declining balance (DDB-Method), assume any remaining depreciation is claimed in the last year.
d. MACRS depreciation, where the Salvage Value is zero.
The Company described in problem 1 is selling the office furniture after 3 years for $40,000.
a) Determine the MACRS depreciation schedule for 3 years of ownership
b) Determine any extra taxable income (recaptured depreciation), if any, on the sale of the furniture.
