A contractor purchased a tractor at a cost of 135000 and pla

A contractor purchased a tractor at a cost of $135,000 and plans to use it for 5 years which time... A contractor purchased a tractor at a cost of $135,000 and plans to use it for 5 years which time she estimates the salvage value of the tractor will be $65,000. Using the depreciation methods shown below, what is the book value of the tractor at the end of each of the 5 years?

Find Using Tax Code Depreciation Schedule

Solution

Solution:-

Given :-

purchage cost of tractor = 135000 dollars

Solvage value of tractor = 65000 dollars

Years                                               depreciation                                book value

1.               135000x 0.20                 27000                             135000 - 27000 = 108000

2.                 135000 x 0.32               43200                               108000 – 43200 = 64800

3.                135000 x 0.192              25920                                64800 – 25920 = 38880

4.                135000 x 0.1152              15552                               38880 – 15552 = 23328

5.                135000 x 0.1152              15552                                 23328 – 15552 = 7776

6.                135000 x 0.0576              7776                                   7776 – 7776 = 0