Rasmussen Accounting 269 -Module 3 – Written Assignment 2

Module 3 – Written Assignment 2Tom purchases a new manufacturing machine for his business on April 1, 2015 for $27,000. The machine isdepreciated under MACRS with a 7-year recovery period. This maachine was his only asset acquisition of thisyear. Thomas elects to expense $25,000 of the cost under Section 179.a. What is Tom’s total deprciation deduction for the machine in 2015.b. Tom decides to sell his machine on October 5, 2017 for $10,000. Compute Tom’s depreciation deductionfor 2015 through 2017. The adjusted basis of the machine on October 5, 2017, and the gain or loss on thesale. (HINT: 2017 is only 1/2 year).Refer to the table on the right to calculate the MACRS depreciation a. Sec. 179 ExpenseMACRS Depreciation2015 Total b. 201520162017Accumulated DepreciationAdjusted basis and gain/loss on the saleSale PriceAdjusted BasisCostAccumulated DepreciationGain/Loss on sale machine istion of this deductions on the MACRS Percentage RatesRecovery PeriodRecoveryYear12345678 3- Year33.3344.4514.817.41- 5-Year20.0032.0019.2011.5211.525.73- 7-Year14.2924.4917.4912.498.938.928.934.46

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