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22 September, 09:13

Better Beverages purchased $139,700 of fixed assets that are classified as five-year MACRS property. The MACRS rates are. 2,.32,.192,.1152,.1152, and. 0576 for Years 1 to 6, respectively. What will the accumulated depreciation be at the end of Year 4 if the tax rate is 21 percent and no bonus depreciation is taken?

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  1. 22 September, 10:07
    0
    = $115,559.84

    Explanation:

    The MACRS represents Modified Accelerated Cost Recovery System and it represents a depreciation method that is accepted for taxation purpose in the United States. The MACRS allows an asset's capitalized cost's recovery over a period of time based on annual deductions.

    From the question, the fixed asset was purchased for $139,700

    the MACRS rate to use at the end of 4 years = 0.2, 0.32, 0.192 and 0.1152

    The accumulated depreciation therefore,

    = (0.2+0.32+0.192+0.1152) x $139,700

    = $115,559.84
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