A furniture manufacturer buys special new manufacturing equipment for 1.8 M$ that has an estimated salvage...
A furniture manufacturer buys special new manufacturing equipment for 1.8 M$ that has an estimated salvage value of 0.3 M$ (M is mega-). If the useful life for tax purposes is 7 years, find the book value at the end of 4 years for MACRS depreciation.
Homework Answers
Book value 4 year=$ 942,857.14
Explanation:
Depreciation=(cost -salvage)/useful life
=(1,800,000-30,000)/7
=1,500,000/7
=214,287.71
Depreciation for the 4 year=214,287.71*4
=857,142.86
Net book value=cost -accumulated depreciation
=1,800,000-857,142.86
=942,857.14
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