Find the annual straight–line rate of depreciation for the estimated life.
46)
7 years
46)
A)
1.4%
B)
7%
C)
7.1%
D)
14.3%
Use the MACRS depreciation rates table to find the recovery percent (rate), given the recovery year and recovery period.
MACRS Depreciation Rates
Applicable Percent for the Class of Property
Recovery
Year 3–Year 5–Year 7–Year 10–Year 20–Year 27.5–Year
1
2
3
4
5
6
7
8
9
10
11
33.33
44.45
14.81
7.41
20.00
32.00
19.20
11.52
11.52
5.76
14.29
24.49
17.49
12.49
8.93
8.92
8.93
4.46
10.00
18.00
14.40
11.52
9.22
7.37
6.55
6.55
6.56
6.55
3.28
3.750
7.219
6.677
6.177
5.713
5.285
4.888
4.522
4.462
4.461
4.462
3.485
3.636
3.636
3.636
3.636
3.636
3.636
3.636
3.636
3.637
3.636
47)
Recovery year: 8
Recovery period: 10–year
47)
A)
6.56%
B)
4.46%
C)
4.522%
D)
6.55%
Find the first year’s depreciation using the MACRS method of depreciation and the MACRS depreciation rates table.
Round to the nearest dollar.
MACRS Depreciation Rates
Applicable Percent for the Class of Property
Recovery
Year 3–Year 5–Year 7–Year 10–Year 20–Year 27.5–Year
1
2
3
4
5
6
7
8
9
10
11
33.33
44.45
14.81
7.41
20.00
32.00
19.20
11.52
11.52
5.76
14.29
24.49
17.49
12.49
8.93
8.92
8.93
4.46
10.00
18.00
14.40
11.52
9.22
7.37
6.55
6.55
6.56
6.55
3.28
3.750
7.219
6.677
6.177
5.713
5.285
4.888
4.522
4.462
4.461
4.462
3.485
3.636
3.636
3.636
3.636
3.636
3.636
3.636
3.636
3.637
3.636
48)
Cost: $225,500
Period: 7–year
48)
A)
$32,224
B)
$22,550
C)
$45,100
D)
$55,225
49)
Cost: $401,500
Period: 27.5–year
49)
A)
$13,992
B)
$15,056
C)
$14,574
D)
$1,399,228
Find the book value to the nearest dollar.
50)
Cost $6660, life 3 years, scrap value $533 at the end of 1 year using double–declining balance
method
50)
A)
$4618
B)
$2575
C)
$2220
D)
$4440
Use the MACRS depreciation rates table to solve the problem. Round to the nearest dollar.
MACRS Depreciation Rates
Applicable Percent for the Class of Property
Recovery
Year 3–Year 5–Year 7–Year 10–Year 20–Year 27.5–Year
1
2
3
4
5
6
7
8
9
10
11
33.33
44.45
14.81
7.41
20.00
32.00
19.20
11.52
11.52
5.76
14.29
24.49
17.49
12.49
8.93
8.92
8.93
4.46
10.00
18.00
14.40
11.52
9.22
7.37
6.55
6.55
6.56
6.55
3.28
3.750
7.219
6.677
6.177
5.713
5.285
4.888
4.522
4.462
4.461
4.462
3.485
3.636
3.636
3.636
3.636
3.636
3.636
3.636
3.636
3.637
3.636
51)
NewAge Consulting purchased a desktop publishing system (5–year property) at a cost of $8900.
Find the accumulated depreciation at the end of 3 years.
51)
A)
$5008
B)
$6337
C)
$8241
D)
$7362
Find the first year’s depreciation, using the double–declining–balance method. Round to the nearest dollar.
52)
Cost: $1740
Est. life: 20 years
Est. scrap: $174
52)
A)
$174
B)
$157
C)
$78
D)
$87
Find the book value to the nearest dollar.
53)
Cost $7230, life 9 years, scrap value $723 at the end of 3 years using double–declining balance
method
53)
A)
$5078
B)
$5293
C)
$3785
D)
$3402
Find the first year‘s depreciation using the sum–of–the–years’–digits method of depreciation. Round to the nearest dollar.
54)
Cost: $50,000
Estimated life: 10 years
Estimated scrap value: None
Depreciation (year 1): $
54)
A)
$40,909
B)
$9091
C)
$5000
D)
$45,000
Use the double–declining–balance method of depreciation. Round to the nearest dollar.
55)
Metal Fabricators buys a milling machine for $2800 and estimates its useful life at 4 years and its
salvage value at $280. What is the amount of depreciation each year?
55)
A)
$1400, $700, $350, $70
B)
$700, $700, $700, $700
C)
$1260, $630, $630, $350
D)
$630, $630, $630, $630
Find the book value to the nearest dollar.
56)
Cost $5030, life 8 years, scrap value $352 at the end of 3 years, sum–of–the–years’–digits method
56)
A)
$3773
B)
$2301
C)
$3144
D)
$3276
Find the first year’s depreciation using the MACRS method of depreciation and the MACRS depreciation rates table.
Round to the nearest dollar.
MACRS Depreciation Rates
Applicable Percent for the Class of Property
Recovery
Year 3–Year 5–Year 7–Year 10–Year 20–Year 27.5–Year
1
2
3
4
5
6
7
8
9
10
11
33.33
44.45
14.81
7.41
20.00
32.00
19.20
11.52
11.52
5.76
14.29
24.49
17.49
12.49
8.93
8.92
8.93
4.46
10.00
18.00
14.40
11.52
9.22
7.37
6.55
6.55
6.56
6.55
3.28
3.750
7.219
6.677
6.177
5.713
5.285
4.888
4.522
4.462
4.461
4.462
3.485
3.636
3.636
3.636
3.636
3.636
3.636
3.636
3.636
3.637
3.636
57)
Cost: $29,500
Period: 5–year
57)
A)
$9832
B)
$5900
C)
$9440
D)
$4216
Solve the problem. Round to the nearest dollar.
58)
Rainbow Ice Cream bought a frozen custard maker that cost $6500. The expected life is 6000 hours
of production with a salvage value of $650. Find the book value at the end of the third year. Use the
units–of–production method of depreciation given the following production schedule.
Year 1 1530 hours
Year 2 1650 hours
Year 3 1290 hours
58)
A)
$2119
B)
$4381
C)
$1657
D)
$1469
59)
A construction company purchased a piece of equipment for $1470. The expected life is 8000 hours,
after which it will have a salvage value of $310. Find the amount of depreciation for the first year if
the piece of equipment was used for 2000 hours. Use the units–of–production method of
depreciation.
59)
A)
$368
B)
$300
C)
$215
D)
$175
Use the double–declining–balance method of depreciation. Round to the nearest dollar.
60)
Royal Oaks Golf Course buys a tractor for $8500 and estimates the life at 8 years with a scrap value
of $850. What is its book value at the end of the fourth year?
60)
A)
$2690
B)
$3825
C)
$2420
D)
$850
Use the sum–of–the–years’–digits method of depreciation. Round to the nearest dollar.
61)
Find the book value at the end of the third year for a service van which cost $25,000, has a life of 8
years, and an estimated scrap value of $2500.
61)
A)
$15,625
B)
$9375
C)
$11,875
D)
$13,125
Find the annual double–declining–balance (200% method) rate of depreciation.
62)
30 years
62)
A)
12
3%
B)
62
3%
C)
300%
D)
31
3%
Find the book value after the given number of years, using the straight–line method. Round your answer to the nearest
dollar.
63)
Find the book value at the end of 7 years.
Cost: $2920
Estimated life: 10 years
Estimated scrap value: $146
63)
A)
$1942
B)
$2643
C)
$978
D)
$876
Use the MACRS depreciation rates table to find the recovery percent (rate), given the recovery year and recovery period.
MACRS Depreciation Rates
Applicable Percent for the Class of Property
Recovery
Year 3–Year 5–Year 7–Year 10–Year 20–Year 27.5–Year
1
2
3
4
5
6
7
8
9
10
11
33.33
44.45
14.81
7.41
20.00
32.00
19.20
11.52
11.52
5.76
14.29
24.49
17.49
12.49
8.93
8.92
8.93
4.46
10.00
18.00
14.40
11.52
9.22
7.37
6.55
6.55
6.56
6.55
3.28
3.750
7.219
6.677
6.177
5.713
5.285
4.888
4.522
4.462
4.461
4.462
3.485
3.636
3.636
3.636
3.636
3.636
3.636
3.636
3.636
3.637
3.636
64)
Recovery year: 11
Recovery period: 20–year
64)
A)
4.462%
B)
3.637%
C)
4.522%
D)
4.461%
Find the depreciation per unit. Round to the nearest cent.
65)
Cost: $6800
Salvage: $600
Est. Life: 35,000 units
65)
A)
$0.18
B)
$1.80
C)
$1.90
D)
$0.19
Find the first year’s depreciation using the MACRS method of depreciation and the MACRS depreciation rates table.
Round to the nearest dollar.
MACRS Depreciation Rates
Applicable Percent for the Class of Property
Recovery
Year 3–Year 5–Year 7–Year 10–Year 20–Year 27.5–Year
1
2
3
4
5
6
7
8
9
10
11
33.33
44.45
14.81
7.41
20.00
32.00
19.20
11.52
11.52
5.76
14.29
24.49
17.49
12.49
8.93
8.92
8.93
4.46
10.00
18.00
14.40
11.52
9.22
7.37
6.55
6.55
6.56
6.55
3.28
3.750
7.219
6.677
6.177
5.713
5.285
4.888
4.522
4.462
4.461
4.462
3.485
3.636
3.636
3.636
3.636
3.636
3.636
3.636
3.636
3.637
3.636
66)
Cost: $435,000
Period: 10–year
66)
A)
$62,162
B)
$43,500
C)
$78,300
D)
$106,532
Use the MACRS depreciation rates table to find the recovery percent (rate), given the recovery year and recovery period.
MACRS Depreciation Rates
Applicable Percent for the Class of Property
Recovery
Year 3–Year 5–Year 7–Year 10–Year 20–Year 27.5–Year
1
2
3
4
5
6
7
8
9
10
11
33.33
44.45
14.81
7.41
20.00
32.00
19.20
11.52
11.52
5.76
14.29
24.49
17.49
12.49
8.93
8.92
8.93
4.46
10.00
18.00
14.40
11.52
9.22
7.37
6.55
6.55
6.56
6.55
3.28
3.750
7.219
6.677
6.177
5.713
5.285
4.888
4.522
4.462
4.461
4.462
3.485
3.636
3.636
3.636
3.636
3.636
3.636
3.636
3.636
3.637
3.636
67)
Recovery year: 3
Recovery period: 3–year
67)
A)
19.2%
B)
7.41%
C)
11.52%
D)
14.81%
68)
Recovery year: 6
Recovery period: 27.5–year
68)
A)
3.637%
B)
6.177%
C)
1.818%
D)
3.636%
Find the book value after the given number of years, using the straight–line method. Round your answer to the nearest
dollar.
69)
Find the book value at the end of 4 years.
Cost: $42,700
Estimated life: 7 years
Estimated scrap value: $3900
69)
A)
$20,529
B)
$22,171
C)
$31,614
D)
$18,300
Find the annual double–declining–balance (200% method) rate of depreciation.
70)
5 years
70)
A)
50%
B)
40%
C)
10%
D)
20%
Find the book value to the nearest dollar.
71)
Cost $5450, life 6 years, scrap value $382 at the end of 2 years using double–declining balance
method
71)
A)
$3901
B)
$3785
C)
$2634
D)
$2422
Use the MACRS depreciation rates table to solve the problem. Round to the nearest dollar.
MACRS Depreciation Rates
Applicable Percent for the Class of Property
Recovery
Year 3–Year 5–Year 7–Year 10–Year 20–Year 27.5–Year
1
2
3
4
5
6
7
8
9
10
11
33.33
44.45
14.81
7.41
20.00
32.00
19.20
11.52
11.52
5.76
14.29
24.49
17.49
12.49
8.93
8.92
8.93
4.46
10.00
18.00
14.40
11.52
9.22
7.37
6.55
6.55
6.56
6.55
3.28
3.750
7.219
6.677
6.177
5.713
5.285
4.888
4.522
4.462
4.461
4.462
3.485
3.636
3.636
3.636
3.636
3.636
3.636
3.636
3.636
3.637
3.636
72)
Respiratory Care, Inc. purchased new packaging equipment (5–year property) at a cost of $7880.
Find the book value at the end of 4 years.
72)
A)
$2269
B)
$1362
C)
$2462
D)
$2471
Solve the problem.
73)
The Windmill Harbour Marina purchased a boat hauling rig for $720,000. Its estimated life is 15
years, at which time it will have a scrap value of $2800. Use the straight–line method of
depreciation to find the annual amount of depreciation. Find the book value at the end of 8 years.
73)
A)
$48,000, $1,102,504
B)
$47,813, $382,504
C)
$48,000, $384,000
D)
$47,813, $337,496
Find the first year’s depreciation, using the double–declining–balance method. Round to the nearest dollar.
74)
Cost: $5400
Est. life: 6 years
Est. scrap: $900
74)
A)
$750
B)
$1500
C)
$900
D)
$1800
Find the depreciation per unit. Round to the nearest cent.
75)
Cost: $9000
Salvage: $450
Est. Life: 120,000 copies
75)
A)
$0.80
B)
$0.08
C)
$0.70
D)
$0.07
Find the book value after the given number of years, using the straight–line method. Round your answer to the nearest
dollar.
76)
Find the book value at the end of 2 years.
Cost: $68,600
Estimated life: 8 years
Estimated scrap value: $6860
76)
A)
$60,883
B)
$15,435
C)
$53,165
D)
$51,450
Find the book value using the MACRS method of depreciation and the MACRS depreciation rates table. Round to the
nearest dollar.
MACRS Depreciation Rates
Applicable Percent for the Class of Property
Recovery
Year 3–Year 5–Year 7–Year 10–Year 20–Year 27.5–Year
1
2
3
4
5
6
7
8
9
10
11
33.33
44.45
14.81
7.41
20.00
32.00
19.20
11.52
11.52
5.76
14.29
24.49
17.49
12.49
8.93
8.92
8.93
4.46
10.00
18.00
14.40
11.52
9.22
7.37
6.55
6.55
6.56
6.55
3.28
3.750
7.219
6.677
6.177
5.713
5.285
4.888
4.522
4.462
4.461
4.462
3.485
3.636
3.636
3.636
3.636
3.636
3.636
3.636
3.636
3.637
3.636
77)
Cost: $8980
Recovery Period: 3–year
After: First Year
77)
A)
$7256
B)
$7184
C)
$7650
D)
$5987
Use the double–declining–balance method of depreciation. Round to the nearest dollar.
78)
Beta Graphics buys some CAD–CAM computer equipment at a cost of $12,150 and estimates the
life at 10 years with a scrap value of $1215. What is its book value at the end of the fourth year?
78)
A)
$1215
B)
$7776
C)
$4479
D)
$4977
Find the sum–of–the–years’–digits depreciation fraction for the first year.
79)
6 years
79)
A)
1
21
B)
6
12
C)
6
21
D)
12
21
Solve the problem.
80)
A drilling rig cost $52,300 and has an estimated life of 11 years and a scrap value of $4707. Find the
book value at the end of 4 years using the straight–line method. Round to nearest dollar.
80)
A)
$17,307
B)
$47,973
C)
$33,282
D)
$34,993
Find the annual amount of depreciation using the units–of–production method. Round to the nearest dollar.
81)
Depreciation per unit: $0.06
Units of production: 175,000
81)
A)
$1050
B)
$29,167
C)
$291,667
D)
$10,500
Find the book value to the nearest dollar.
82)
Cost $82,700, life 11 years, scrap value $7443 at the end of 1 year, sum–of–the–years’–digits method
82)
A)
$75,858
B)
$75,182
C)
$70,157
D)
$67,664
Answer Key
Testname: C14
Answer Key
Testname: C14