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A piece of newly purchased industrial equipment costs $728143 and is classified as seven-year property under...

A piece of newly purchased industrial equipment costs $728143 and is classified as seven-year property under MACRS. What is the book value at the beginning of year 8? (Round your final answer to the nearest dollar amount. Omit the "$" sign and commas in your response. For example, $123,456.78 should be entered as 123457.)

Modified ACRS Depreciation Allowances (Table 10.7)
Year Three-Year Five-Year Seven-Year
1 33.33% 20.00% 14.29%
2 44.45 32.00 24.49
3 14.81 19.20 17.49
4 7.41 11.52 12.49
5 11.52 8.93
6 5.76 8.92
7 8.93
8 4.46
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Answer #1

Accumulated depreciation upto year 7

= Cost of equipment * Sum of depreciation rates

= 728143 * (14.29% + 24.49% + 17.49% + 12.49% + 8.93% + 8.92% + 8.93%)

= 695667.82

Book value

= Cost of equipment - accumulated depreciation

= 728143 - 695667.82

= 32475.18

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