Exam 13: Depreciation

Paul purchased a mobile home that originally cost $185,000 and has a salvage value of $42,000? What depreciation class is used? Use the MACRS method.

Dawn bought a van at the beginning of the year for $24,000. The van has an estimated life of 8 years and a salvage value of $5,500 at the end of the 8-year period. What is the depreciation using the straight-line method?

The original cost of a dirt bike was $9,000 with an estimated life of 10 years. What is the end-of-year book value?

Jed bought a truck at the beginning of the year for $18,750. The truck has an estimated life of 6 years and a salvage value of $4,500 at the end of the 6-year period. What is the depreciation using the straight-line method?

The depreciation schedule for office furniture is created in Excel. The cost of the asset is in Cell C4, the life of the asset is in Cell C5. Column A contains the year, Column B contains the rate percent, Column C contains the cost basis, Column D contains the annual depreciation, Column E contains the accumulated depreciation, and Column F contains the end-of-year book value. Using the modified accelerated cost recovery system of depreciation, what formula should be keyed into Cell E9 to calculate the second-year accumulated depreciation?

The salvage value is deducted when calculating the double-declining-balance method of depreciation.

Julie bought a boat at the beginning of the year for $35,000. The boat has an estimated life of 8 years and a salvage value of $14,000 at the end of the 8-year period. What is the book value after the first year?

The life of a dishwasher is 6 years. The original cost of the dishwasher was $4,000 and the salvage value was $1,000. What is the first-year depreciation?

Steven purchased a safe for his office that cost $3,800 and has a salvage value of $1,000. Steven plans to use the safe 95% for business purposes and 5% for personal use. What is the second-year depreciation? Use the MACRS method.

When adding all annual depreciation, the total should not equal the original cost of the item.

The life of a refrigerator is 8 years. What is the fraction to use in the annual depreciation formula for the second year?

The life of a car is 5 years. The original cost of the car was $25,000 and the salvage value was $5,000. What is the second-year depreciation?

What is the sixth-year depreciation of a farm building that originally cost $30,000 and has a salvage value of $10,000? Use the MACRS method.

The original cost of a jet ski was $12,000 with an estimated life of 4 years. What is the second-year accumulated depreciation?

The original cost of a Jeep was $35,000 with an estimated life of 5 years. What is the end-of-year book value?

The life of an oven is 15 years. The original cost of the oven was $2,500 and the salvage value was $800. What is the depreciation amount?

The Modified Accelerated Cost Recovery System (MACRS) applies to depreciation for all assets put into service after ___________________________.

What is the second-year depreciation of a rent-to-own property that originally cost $250,000 and has a salvage value of $25,000? Use the MACRS method.

Lani bought a car at the beginning of the year for $28,000. The van has an estimated life of 10 years and a salvage value of $8,000 at the end of the 10-year period. What is the book value after the first year?

The original cost of a car was $32,000 with an estimated life of 8 years. What is the first-year depreciation?