David Marcus purchased new office furniture July 15 2011 for

David Marcus purchased new office furniture July 15, 2011. for $28.100. Uk MACRS (7-year class) to show the rate, depreciation, and beginning and ending book values for 2011, 2012, and 2013. Round to the nearest dollar. (2 points for each correct answer)

Solution

The office furniture is purchased on july 15 2011 for $28,100

Formula:

Depreciation in 1st year = cost * (1/ useful life) * A * depreciation convention

Depreciation in subsequent years = (cost - Depreciation in previous yr ) * 1/ Recovery period * A

here A = 100% or 150% or 200%

According to MACRS (class 7) the Depreciation Rate is

2011 - rate = 14.29

2012- rate = 24.49

2013 - rate = 17.49

year rate cost Depreciation

2011 14.29 * $28,100 = $401,549

2012 24.49 * $28,100 = $688,169

2013 17.49 * $28,100 = $491,469