Acompany purchases an industriallser for S140.000. The device has ausefu of yean and asahage valemakat valehe end of those four years of S50000. The before-ta cash fow is estimated e be S90.000 per course suggested applying the 3year MACRS GOS) method instead of the straigheine method Gven an efective taate of 24s, determine the depreciation schedue and the ater ta cash fow ACRS deprediation schedule for this anse he industrallser was the daposal of the assetthe end of this year You for S0 000 in year e (consider year to be the "year owin the able in Parn whatbe the amount of gain depreciation ecapture)
Acompany purchases an industriallser for S140.000. The device has ausefu of yean and asahage valemakat valehe end of those four years of S50000. The before-ta cash fow is estimated e be S90.000 per course suggested applying the 3year MACRS GOS) method instead of the straigheine method Gven an efective taate of 24s, determine the depreciation schedue and the ater ta cash fow ACRS deprediation schedule for this anse he industrallser was the daposal of the assetthe end of this year You for S0 000 in year e (consider year to be the "year owin the able in Parn whatbe the amount of gain depreciation ecapture)
Chapter11: Long-term Assets
Section: Chapter Questions
Problem 11PA: Montezuma Inc. purchases a delivery truck for $15,000. The truck has a salvage value of $3,000 and...
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Depreciation Methods
The word "depreciation" is defined as an accounting method wherein the cost of tangible assets is spread over its useful life and it usually denotes how much of the assets value has been used up. The depreciation is usually considered as an operating expense. The main reason behind depreciation includes wear and tear of the assets, obsolescence etc.
Depreciation Accounting
In terms of accounting, with the passage of time the value of a fixed asset (like machinery, plants, furniture etc.) goes down over a specific period of time is known as depreciation. Now, the question comes in your mind, why the value of the fixed asset reduces over time.
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Question
![A company purchases an industrial laser for $140000. The device has a usetul e of 4 years and a salvage value (market value) at the end of those four years of S50.000. The beforetax cash fow is estimated to be $90,000 per
You, of course, suggested applying the 3year MACRS (GDS) method instead of the straight ine method Given an effective tax rate of 24%. determine the depreciation schedule and the ater tax cash fow
b. Based on the MAČRS depreciation schedule for this asset E the industrial laser was sold for S90.000 in year two (consider year bwo to be the "year 2" row in the table in Pan (a), what wilbe the amount of gain (depreciation
recapture) or loss on the disposal of the asset at the end of this year?
ye
Cick the lcon to view the GOS Recovery Rates () for the 3year property class
a. Determine the MACRS depreciation amounts and the ater tax cash flow for this laser. Fl in the table below (Round to the nearest dollar)
Depreciation, S
AICFS
-140.000
EOY](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F25838928-0cda-4c23-88b4-f5956d6d213d%2F6bdc4d51-41b0-4b85-a0f8-670386c60b00%2Fbmw7lio_processed.png&w=3840&q=75)
Transcribed Image Text:A company purchases an industrial laser for $140000. The device has a usetul e of 4 years and a salvage value (market value) at the end of those four years of S50.000. The beforetax cash fow is estimated to be $90,000 per
You, of course, suggested applying the 3year MACRS (GDS) method instead of the straight ine method Given an effective tax rate of 24%. determine the depreciation schedule and the ater tax cash fow
b. Based on the MAČRS depreciation schedule for this asset E the industrial laser was sold for S90.000 in year two (consider year bwo to be the "year 2" row in the table in Pan (a), what wilbe the amount of gain (depreciation
recapture) or loss on the disposal of the asset at the end of this year?
ye
Cick the lcon to view the GOS Recovery Rates () for the 3year property class
a. Determine the MACRS depreciation amounts and the ater tax cash flow for this laser. Fl in the table below (Round to the nearest dollar)
Depreciation, S
AICFS
-140.000
EOY
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