K Depreciation expense. Brock Florist Company buys a new delivery truck for $29,000. It is classified as a light-duty truck. a. Calculate the depreciation schedule using a five-year life, straight-line depreciation, and the half-year convention for the first and last years. b. Calculate the depreciation schedule using a five-year life and MACRS depreciation, c. Compare the depreciation schedules from parts (a) and (b) before and after taxes using a 30% tax rate. What do you notice about the difference between these two methods? a. Using a five-year life, straight-line depreciation, and the half-year convention for the first and last years, what is the annual depreciation of the truck? (Round to the nearest dollar.) Data table MACRS Fixed Annual Expense Percentages by Recovery Class Year 3-Year 5-Year 7-Year 10-Year 1 33.33% 20.00% 14.29% 10.00% 2 44.45% 32.00% 24.49% 18.00% 3 14.81% 19.20% 17.49% 14.40% 4 7.41% 11.52% 12.49% 11.52% 5 11.52% 8.93% 9.22% 6 5.76% 8.93% 7.37% 7 8.93% 6.55% 8 4.45% 6.55% 9 6.55% 10 6.55% 11 3.28% Print Done
K Depreciation expense. Brock Florist Company buys a new delivery truck for $29,000. It is classified as a light-duty truck. a. Calculate the depreciation schedule using a five-year life, straight-line depreciation, and the half-year convention for the first and last years. b. Calculate the depreciation schedule using a five-year life and MACRS depreciation, c. Compare the depreciation schedules from parts (a) and (b) before and after taxes using a 30% tax rate. What do you notice about the difference between these two methods? a. Using a five-year life, straight-line depreciation, and the half-year convention for the first and last years, what is the annual depreciation of the truck? (Round to the nearest dollar.) Data table MACRS Fixed Annual Expense Percentages by Recovery Class Year 3-Year 5-Year 7-Year 10-Year 1 33.33% 20.00% 14.29% 10.00% 2 44.45% 32.00% 24.49% 18.00% 3 14.81% 19.20% 17.49% 14.40% 4 7.41% 11.52% 12.49% 11.52% 5 11.52% 8.93% 9.22% 6 5.76% 8.93% 7.37% 7 8.93% 6.55% 8 4.45% 6.55% 9 6.55% 10 6.55% 11 3.28% Print Done
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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