Question

33. What is the maximum tax deduction for the machine in 2023 (Year es a. So, because the machine has a 5-year recovery period b. $576 c. $3,226 d. $6,451 34. On October 20 of the current vear, a company with a December 31 Year-end purchases a factory for $150,000, which includes $50.000 the land. What is first-year depreciation for this asset under MACRS? a. $535 b. $53,500 c. $111 d. $2,461 35. Which of the following is not subject to annual IRS depreciation limits? a. An unmodified company van weighing 5,000 pounds b. An unmodified company van weighing 7,500 pounds c. A company car used by the company's sales manager d. A company car used by the company's president Use the following information to answer Questions 36-42: A company that uses a calendar year purchases an asset with a historical cost of $250,000, a residual value of $5,000 and an estimated life of 5 years. 36. Under the straight-line method, the depreciation rate is ... 000 a. 40% b. 20% c. 10% d. 5% 37. If the asset is acquired on September 30, 2016, first-year depreciation under the straight-line method is ... a. $50,000 b. $49,000 c. $25,000 d. $12,250 38. If the asset is acquired on January 1, 2016, first-year depreciation under the double-declining balance method is ... a. 40% b. 20% c. 25% d. 5% 39. If the asset is acquired on January 1, 2016, and is depreciated under the double-declining balance method, second-year depreciation is... a. $100,000 b. $60,000 c. $50,000 d. $25,000

bookeeping

Answer 1

Straight Line Method

Cost of Assets $250000

Salvage Value $5000

Useful Life 5 years

Depreciate amount per Year = (Cost of Assets - Salvage Value)/ Useful Life

Depreciate amount per Year = ($250000-$5000)/5 = $49000

36 B

Depreciation Rate : Depreciate Value per year/(Cost of Assets - Salvage Value)

Depreciation Rate : $49000/(($250000-$5000) = 20%

37 B Depreciated Value Per Year is $49000 as mentioned above

Double Declining Balance Method in which the asset value is depreciated at twice the rate it is done in the straight-line method.

Double Declining Balance Method Formula = 2 X Cost of the asset X Depreciation rate

38 B

Depreciation rate = 1/useful life *100 = (1/5) * 100 = 20%

39 B

Double Declining Balance Method Formula = 2 X $250000 X 20% =$60000

Answer 2

$0, because the mahine has a 5year recovery period