Your consulting company is planning to purchase a new server for knowledge management. The initial cost...
Your consulting company is planning to purchase a new server for knowledge management. The initial cost of the server amounts to $ 500,000 with a salvage value of $ 30,000 at the end of its useful life, which is 5 years. Prepare a table in which the depreciation expense and the book value are compared for SL and MACRS depreciation methods.
Homework Answers
We have used MACRS 5 year rates
| SL | MACRS | |||||
| Opening Balance | Depreciation | Book value | Opening Balance | Depreciation | Book value | |
| 500000 | 94000 | 406000 | 500000 | 100000 | 400000 | |
| 406000 | 94000 | 312000 | 400000 | 160000 | 240000 | |
| 312000 | 94000 | 218000 | 240000 | 96000 | 144000 | |
| 218000 | 94000 | 124000 | 144000 | 57600 | 86400 | |
| 124000 | 94000 | 30000 | 86400 | 57600 | 28800 | |
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