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16 March, 13:11

Lew just purchased $67,600 of equipment that is classified as 5-year MACRS property. The MACRS rates are 20 percent, 32 percent, 19.2 percent, 11.52 percent, 11.52 percent, and 5.76 percent for Years 1 to 6, respectively. What will be the book value of this equipment at the end of four years if he ignores bonus depreciation

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  1. 16 March, 15:40
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    The book value of this equipment at the end of four years if he ignores bonus depreciation $26,290.

    Explanation:

    Cost of property = $67,600

    Balance Depreciation

    Year 1 67,600 13520

    Year 2 54,080 17,306

    Year 3 36,774 7,061

    Year 4 29,713 3,423

    Book vaue at the end of year 4 = 29,713 - 3423 = $26,290
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