MACRSDepreciation RateYear 020.00%OA. $19,104OB. $11,520OC. $1,896OD. $9,480Year 132.00%Year 219.20%Year 3Year 411.52% 11.52%Year 55.76%A bakery invests $40,000 in a light delivery truck. This was depreciated using the five-year MACRS schedule shownabove. If the company sold it immediately after the end of year 2 for $21,000, what would be the after-tax cash flow fromthe sale of this asset, given a tax rate of 20%?

Cost of asset = $40,000 The book value of the asset at the end of year 2 is Book…

Answered: MACRS Depreciation Rate Year 0 20.00%…

College Accounting (Book Only): A Career Approach

13th Edition

ISBN:9781337280570

Author:Scott, Cathy J.

Publisher:Scott, Cathy J.

ChapterA: Methods Of Depreciation

Section: Chapter Questions

Problem 4P: Use the information in Problem A-1 to solve this problem. Assume that the van is five-year property...

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Similar questions

A delivery van was bought for 18,000. The estimated life of the van is four years. The trade-in value at the end of four years is estimated to be 2,000. Required Prepare a depreciation schedule for the four-year period using the straight-line method. Check Figure Year 1 depreciation, 4,000
Use the information in Problem A-1 to solve this problem. Assume that the van is five-year property for tax purposes. Required Prepare a schedule of depreciation under MACRS. Round figures to the nearest whole dollar. PROBLEM A-1 A delivery van was bought for 18,000. The estimated life of the van is four years. The trade-in value at the end of four years is estimated to be 2,000. Check Figure Year 3 depreciation, 3,456
Susquehanna Company purchased an asset at the beginning of the current year for 250,000. The estimated residual value is 25,000. Susquehanna estimates that the asset will be used for 10 years and uses straight-line depreciation. Calculate the depreciation expense per year.
Montello Inc. purchases a delivery truck for $15,000. The truck has a salvage value of $3,000 and is expected to be driven for eight years. Montello uses the straight-line depreciation method. Calculate the annual depreciation expense.
Montello Inc. purchases a delivery truck for $25,000. The truck has a salvage value of $6,000 and is expected to be driven for ten years. Montello uses the straight-line depreciation method. Calculate the annual depreciation expense.
Colquhoun International purchases a warehouse for $300,000. The best estimate of the salvage value at the time of purchase was $15,000, and it is expected to be used for twenty-five years. Colquhoun uses the straight-line depreciation method for all warehouse buildings. After four years of recording depreciation, Colquhoun determines that the warehouse will be useful for only another fifteen years. Calculate annual depreciation expense for the first four years. Determine the depreciation expense for the final fifteen years of the assets life, and create the journal entry for year five.
Montello Inc. purchases a delivery truck for $15,000. The truck has a salvage value of $3,000 and is expected to be driven for 120,000 miles. Montello uses the units-of-production depreciation method and in year one it expects to use the truck for 23,000 miles. Calculate the annual depreciation expense.
Chapman Inc. purchased a piece of equipment in 2018. Chapman depreciated the equipment on a straight-line basis over a useful life of 10 years and used a residual value of $12,000. Chapmans depreciation expense for 2019 was $11,000. What was the original cost of the building? a. $98,000 b. $110,000 c. $122,000 d. $134,000
INTANGIBLE LONG-TERM ASSETS Track Town Co. had the following transactions involving intangible assets: Jan. 1 Purchased a patent for leather soles for 10,000 and estimated its useful life to be 10 years. Apr. 1 Purchased a copyright for a design for 15,000 with a life left on the copyright of 25 years. The estimated remaining (economic) life of the copyright is five years. July 1 Signed a five-year franchise agreement and opened a Starting Line high-tech running shoe store. Paid 50,000 to the franchisor. REQUIRED 1. Using the straight-line method, calculate the amortization of the patent, copyright, and franchise. 2. Prepare general journal entries to record the end-of-year amortizations.

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