1. Business
  2. Accounting
  3. pete bought a new coffee machine for 6000 to replace...

Question: pete bought a new coffee machine for 6000 to replace...

Question details

Pete bought a new coffee machine for $6,000 to replace the old machine. Suppose the machine is estimated to have a life of 3 years and no residual value at the end of the life. What are the depreciation expenses over the 3-year period using the straight-line and MACRS methods (Please show work)

The 3-year depreciation schedule of the MACRS method is as follows.

Year 1          2    3 4   

%    33.33 44.45 14.81    7.41       

Year Straight Line Depreciation Expense MACRS Depreciation Expense
1
2
3
4
Total Depreciation

  

Art Angel operated a small seasonal lake marina, renting boats. He runs the business for only four months per year. He bought three new boats for $10,000 each. The new boats are estimated to have a 10-year life and a residual (trade-in) value of $1,200 each. Please answer the following questions. What are the depreciation expenses for the three boats per month using the straight-line method?

Solution by an expert tutor
Blurred Solution
This question has been solved
Subscribe to see this solution