Chapter 17, Problem 13AT

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8th Edition

Robert Brechner + 1 other

ISBN: 9781305585447

Textbook Problem

Stone Age Concrete, Inc.MACRS Depreciation ScheduleCement Manufacturing Equipment |
|||||

End ofYear |
Original Basis (cost) |
Cost Recovery Percentage |
Cost Recovery (depreciation) |
AccumulatedDepreciation |
BookValue |

1 |
_____ |
_____ |
_____ |
_____ |
(new)_____ |

2 |
_____ |
_____ |
_____ |
_____ |
_____ |

3 |
_____ |
_____ |
_____ |
_____ |
_____ |

4 |
_____ |
_____ |
_____ |
_____ |
_____ |

5 |
_____ |
_____ |
_____ |
_____ |
_____ |

**(a)**

To determine

**To calculate:** The basis for depreciation of cement manufacturing equipment valued at $420,000 on March 14,2014 of Stone Age Concrete, Inc. The equipment is used for business 100% of the time and firm’s accountant elected to take a $100,000 section 179 deduction.

Explanation

**Given Information:**

Stone Age Concrete, Inc. purchased cement manufacturing equipment valued at $420,000 on March 14, 2014. The equipment is used for business 100% of the time. The firm’s accountant elected to take a $100,000 section 179 deduction.

**Formula used:**

Procedure to prepare a Depreciation schedule by using MACRS is given below.

First, calculate the basis for depreciation.

Step 1: Percent of business use: If an asset is used for business less than 100% of the time, then multiply the original cost by the business-use percentage of the asset.

Step 2: Section 179 deduction: Find the amount of section 179 deduction by subtracting from a business-use basis.

Step 3: Special depreciation allowances: Find Special depreciation allowances percent with the help of Table 17-4.

**Calculation:**

To calculate the basis for depreciation steps are given below

**(b)**

To determine

**To calculate:** A depreciation schedule for the first five years of operation of cement manufacturing equipment with the help of MACRS.

Sect-17.I P-1TIESect-17.I P-2TIESect-17.I P-3TIESect-17.I P-4TIESect-17.I P-1RESect-17.I P-2RESect-17.I P-3RESect-17.I P-4RESect-17.I P-5RESect-17.I P-6RE

Sect-17.I P-7RESect-17.I P-8RESect-17.I P-9RESect-17.I P-10RESect-17.I P-11RESect-17.I P-12RESect-17.I P-13RESect-17.I P-14RESect-17.I P-15RESect-17.I P-16RESect-17.I P-17RESect-17.I P-18RESect-17.I P-19RESect-17.I P-20RESect-17.I P-21RESect-17.I P-22RESect-17.I P-23RESect-17.I P-24RESect-17.I P-25RESect-17.I P-26RESect-17.I P-27RESect-17.I P-28RESect-17.I P-29RESect-17.I P-30RESect-17.I P-31RESect-17.I P-32RESect-17.I P-33RESect-17.II P-5TIESect-17.II P-6TIESect-17.II P-1RESect-17.II P-2RESect-17.II P-3RESect-17.II P-4RESect-17.II P-5RESect-17.II P-6RESect-17.II P-7RESect-17.II P-8RECh-17 P-1CRCh-17 P-2CRCh-17 P-3CRCh-17 P-4CRCh-17 P-5CRCh-17 P-6CRCh-17 P-7CRCh-17 P-8CRCh-17 P-9CRCh-17 P-10CRCh-17 P-11CRCh-17 P-12CRCh-17 P-13CRCh-17 P-14CRCh-17 P-1ATCh-17 P-2ATCh-17 P-3ATCh-17 P-4ATCh-17 P-5ATCh-17 P-6ATCh-17 P-7ATCh-17 P-8ATCh-17 P-9ATCh-17 P-10ATCh-17 P-11ATCh-17 P-12ATCh-17 P-13ATCh-17 P-14ATCh-17 P-15AT

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