Use Excel and show formulas please You are getting paid lots of money to determine the...

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Use Excel and show formulas please You aregetting paid lots of money to determine the best depreciationmethod for a piece of equipment that costs $50,000 and has a zerosalvage value at the end of a 10-year depreciable life. Compute thedepreciation schedules for each of the following methods:
a) straight line depreciation
b) double declining balance depreciation (DDB)
c) 100% bonus depreciation
d) MACRS

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4.2 Ratings (829 Votes)

a. Straight line = 50,000/10 = 5000 per year for 10 years

b. Double declining = 1/useful life * 2 = 1/10 * 2 = 20%

Year	Cost	Depreciation rate	Depreciation	Accumulated depreciation	Book Value
1	$ 50,000.00	20%	$ 10,000.00	$ 10,000.00	$ 40,000.00
2	$ 40,000.00	20%	$ 8,000.00	$ 18,000.00	$ 32,000.00
3	$ 32,000.00	20%	$ 6,400.00	$ 24,400.00	$ 25,600.00
4	$ 25,600.00	20%	$ 5,120.00	$ 29,520.00	$ 20,480.00
5	$ 20,480.00	20%	$ 4,096.00	$ 33,616.00	$ 16,384.00
6	$ 16,384.00	20%	$ 3,276.80	$ 36,892.80	$ 13,107.20
7	$ 13,107.20	20%	$ 2,621.44	$ 39,514.24	$ 10,485.76
8	$ 10,485.76	20%	$ 2,097.15	$ 41,611.39	$ 8,388.61
9	$ 8,388.61	20%	$ 1,677.72	$ 43,289.11	$ 6,710.89
10	$ 6,710.89	20%	$ 1,342.18	$ 44,631.29	$ 5,368.71

d) Modified Accelerated Cost recovery system-

Percentages for MACRS depreciation taken from the 7-year class personal property table-

Year		MACRS
1	14.29% ($50,000)	=$7,145
2	24.49%($50,000)	=$12,245
3	17.49%($50,000)	=$8,745
4	12.49%($50,000)	=$6,245
5	8.93%($50,000)	=$4,465
6	8.92%($50,000)	=$4,460
7	8.93%($50,000)	=$4,465
8	4.46%($50,000)	=$2,230
9.		0

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a) straight line depreciation

b) double declining balance depreciation (DDB)

c) 100% bonus depreciation

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Use Excel and show formulas please You aregetting paid lots of money to determine the best depreciationmethod for a piece of equipment that costs $50,000 and has a zerosalvage value at the end of a 10-year depreciable life. Compute thedepreciation schedules for each of the following methods:a) straight line depreciationb) double declining balance depreciation (DDB)c) 100% bonus depreciationd) MACRS