Question

A precision five-axis CNC milling machine costs $200,000, and it will be scrapped after 10 years. Compute the book value and depreciation for the first 3 years using

NOTE: Use a net tax rate of 22.98% for all problems (disregard the rate given in the problems)

(a) MACRS depreciation

(b) straight-line depreciation

Answer 1

Original cost of Useful life = 10 Years MACRS method Depreciation expenses-Original cost of $200,000 * Depreciation rate eciation schedule for first 3 years Year Opening book value Depreciation rate 10% 18% 14.40% Depreciation expenses Ending book value S200,000 $180,000 $144,000 $20,000 $36,000 S28,800.00 $180,000 $144,000 $115,200.00 Straight line method Depreciation expenses - Original cost /Useful life S200,000/10S20,000 eciation schedule for first 3 years Year Opening book value Depreciation expenses Ending book value S200,000 $180,000 $160,000 $20,000 $20,000 $20,000 $180,000 $160,000 $140,000