Test Bank Chapter 17 Depreciation Slater - Business Math Procedures 13e Test Bank with Answers by Jeffrey Slater. DOCX document preview.
Practical Business Math Procedures, 13e (Slater)
Chapter 17 Depreciation
1) Trade-in value is the same as the residual value.
Difficulty: 1 Easy
Topic: LU 17-01 Concept of Depreciation and the Straight-Line Method
Learning Objective: 17-01 (1) Explain the concept and causes of depreciation.
Bloom's: Remember
Type: Static
Accessibility: Keyboard Navigation
2) Depreciation is an exact science that requires no estimation.
Difficulty: 1 Easy
Topic: LU 17-01 Concept of Depreciation and the Straight-Line Method
Learning Objective: 17-01 (1) Explain the concept and causes of depreciation.
Bloom's: Remember
Type: Static
Accessibility: Keyboard Navigation
3) All assets that last longer than one year will be depreciated.
Difficulty: 1 Easy
Topic: LU 17-01 Concept of Depreciation and the Straight-Line Method
Learning Objective: 17-01 (1) Explain the concept and causes of depreciation.
Bloom's: Remember
Type: Static
Accessibility: Keyboard Navigation
4) Computers will not depreciate.
Difficulty: 1 Easy
Topic: LU 17-01 Concept of Depreciation and the Straight-Line Method
Learning Objective: 17-01 (1) Explain the concept and causes of depreciation.
Bloom's: Remember
Type: Static
Accessibility: Keyboard Navigation
5) Physical deterioration is related to an asset's estimated amount of usefulness.
Difficulty: 1 Easy
Topic: LU 17-01 Concept of Depreciation and the Straight-Line Method
Learning Objective: 17-01 (1) Explain the concept and causes of depreciation.
Bloom's: Remember
Type: Static
Accessibility: Keyboard Navigation
6) Land can be depreciated.
Difficulty: 1 Easy
Topic: LU 17-01 Concept of Depreciation and the Straight-Line Method
Learning Objective: 17-01 (1) Explain the concept and causes of depreciation.
Bloom's: Remember
Type: Static
Accessibility: Keyboard Navigation
7) A non-luxury car will depreciate.
Difficulty: 1 Easy
Topic: LU 17-01 Concept of Depreciation and the Straight-Line Method
Learning Objective: 17-01 (1) Explain the concept and causes of depreciation.
Bloom's: Remember
Type: Static
Accessibility: Keyboard Navigation
8) Product obsolescence means the asset has been fully depreciated.
Difficulty: 1 Easy
Topic: LU 17-01 Concept of Depreciation and the Straight-Line Method
Learning Objective: 17-01 (1) Explain the concept and causes of depreciation.
Bloom's: Remember
Type: Static
Accessibility: Keyboard Navigation
9) Depreciation expense is listed on the balance sheet.
Difficulty: 1 Easy
Topic: LU 17-01 Concept of Depreciation and the Straight-Line Method
Learning Objective: 17-01 (1) Explain the concept and causes of depreciation.
Bloom's: Remember
Type: Static
Accessibility: Keyboard Navigation
10) Accumulated depreciation records the history of depreciation taken to date.
Difficulty: 1 Easy
Topic: LU 17-01 Concept of Depreciation and the Straight-Line Method
Learning Objective: 17-01 (1) Explain the concept and causes of depreciation.
Bloom's: Remember
Type: Static
Accessibility: Keyboard Navigation
11) Depreciation expense results in an indirect tax savings.
Difficulty: 1 Easy
Topic: LU 17-01 Concept of Depreciation and the Straight-Line Method
Learning Objective: 17-01 (1) Explain the concept and causes of depreciation.
Bloom's: Remember
Type: Static
Accessibility: Keyboard Navigation
12) MACRS is not used for tax purposes.
Difficulty: 1 Easy
Topic: LU 17-04 Modified Accelerated Cost Recovery System (MACRS) with Introduction to ACRS (1986, 1989, 2010, 2017)
Learning Objective: 17-04 (1) Explain the goals of ACRS and MACRS and their limitations.
Bloom's: Remember
Type: Static
Accessibility: Keyboard Navigation
13) The straight-line method of depreciation is really an accelerated type of depreciation.
Difficulty: 2 Medium
Topic: LU 17-03 Declining-Balance Method
Learning Objective: 17-03 (1) Explain the importance of residual value in the depreciation schedule.
Bloom's: Understand
Type: Static
Accessibility: Keyboard Navigation
14) Cost minus residual divided by number of years equals depreciation expense taken each year in the straight-line method.
Difficulty: 2 Medium
Topic: LU 17-01 Concept of Depreciation and the Straight-Line Method
Learning Objective: 17-01 (2) Prepare a depreciation schedule and calculate partial-year depreciation.
Bloom's: Understand
Type: Static
Accessibility: Keyboard Navigation
15) Residual value means the actual cash one receives at end of the life of the asset.
Difficulty: 1 Easy
Topic: LU 17-01 Concept of Depreciation and the Straight-Line Method
Learning Objective: 17-01 (1) Explain the concept and causes of depreciation.
Bloom's: Remember
Type: Static
Accessibility: Keyboard Navigation
16) A depreciation schedule for partial years must cover at least three years.
Difficulty: 1 Easy
Topic: LU 17-01 Concept of Depreciation and the Straight-Line Method
Learning Objective: 17-01 (2) Prepare a depreciation schedule and calculate partial-year depreciation.
Bloom's: Remember
Type: Static
Accessibility: Keyboard Navigation
17) A company using the straight-line method over 10 years would be depreciating its asset at a 10% rate each year.
Difficulty: 2 Medium
Topic: LU 17-01 Concept of Depreciation and the Straight-Line Method
Learning Objective: 17-01 (2) Prepare a depreciation schedule and calculate partial-year depreciation.
Bloom's: Understand
Type: Static
Accessibility: Keyboard Navigation
18) In a straight-line depreciation schedule, the depreciation expense is the same each year.
Difficulty: 2 Medium
Topic: LU 17-01 Concept of Depreciation and the Straight-Line Method
Learning Objective: 17-01 (2) Prepare a depreciation schedule and calculate partial-year depreciation.
Bloom's: Remember
Type: Static
Accessibility: Keyboard Navigation
19) Book value is cost plus accumulated depreciation.
Difficulty: 1 Easy
Topic: LU 17-01 Concept of Depreciation and the Straight-Line Method
Learning Objective: 17-01 (1) Explain the concept and causes of depreciation.
Bloom's: Remember
Type: Static
Accessibility: Keyboard Navigation
20) In the straight-line method, book value never goes below the residual value.
Difficulty: 1 Easy
Topic: LU 17-01 Concept of Depreciation and the Straight-Line Method
Learning Objective: 17-01 (1) Explain the concept and causes of depreciation.
Bloom's: Remember
Type: Static
Accessibility: Keyboard Navigation
21) The units-of-production method is based on the passage of time.
Difficulty: 1 Easy
Topic: LU 17-02 Units-of-Production Method
Learning Objective: 17-02 (1) Explain how use affects the units-of-production method.
Bloom's: Remember
Type: Static
Accessibility: Keyboard Navigation
22) Residual value is not used in calculating the depreciation expense per unit of product, miles driven, etc.
Difficulty: 1 Easy
Topic: LU 17-02 Units-of-Production Method
Learning Objective: 17-02 (1) Explain how use affects the units-of-production method.
Bloom's: Remember
Type: Static
Accessibility: Keyboard Navigation
23) The book value in the units-of-production method should never go below the residual value.
Difficulty: 1 Easy
Topic: LU 17-02 Units-of-Production Method
Learning Objective: 17-02 (1) Explain how use affects the units-of-production method.
Bloom's: Remember
Type: Static
Accessibility: Keyboard Navigation
24) ACRS came before MACRS.
Difficulty: 1 Easy
Topic: LU 17-04 Modified Accelerated Cost Recovery System (MACRS) with Introduction to ACRS (1986, 1989, 2010, 2017)
Learning Objective: 17-04 (1) Explain the goals of ACRS and MACRS and their limitations.
Bloom's: Remember
Type: Static
Accessibility: Keyboard Navigation
25) Residual value is deducted in calculating depreciation expense in the declining-balance method.
Difficulty: 1 Easy
Topic: LU 17-02 Units-of-Production Method
Learning Objective: 17-02 (1) Explain how use affects the units-of-production method.
Bloom's: Remember
Type: Static
Accessibility: Keyboard Navigation
26) In the declining-balance method, we can depreciate below the residual value.
Difficulty: 1 Easy
Topic: LU 17-03 Declining-Balance Method
Learning Objective: 17-03 (1) Explain the importance of residual value in the depreciation schedule.
Bloom's: Remember
Type: Static
Accessibility: Keyboard Navigation
27) The Modified Accelerated Cost Recovery System must be used for both financial and tax reporting.
Difficulty: 1 Easy
Topic: LU 17-04 Modified Accelerated Cost Recovery System (MACRS) with Introduction to ACRS (1986, 1989, 2010, 2017)
Learning Objective: 17-04 (1) Explain the goals of ACRS and MACRS and their limitations.
Bloom's: Remember
Type: Static
Accessibility: Keyboard Navigation
28) MACRS does not use residual value; thus, assets are depreciated to zero.
Difficulty: 1 Easy
Topic: LU 17-04 Modified Accelerated Cost Recovery System (MACRS) with Introduction to ACRS (1986, 1989, 2010, 2017)
Learning Objective: 17-04 (1) Explain the goals of ACRS and MACRS and their limitations.
Bloom's: Remember
Type: Static
Accessibility: Keyboard Navigation
29) Which one of the following does not depreciate?
A) Building
B) Land
C) Truck
D) Computer
E) None of these
Difficulty: 1 Easy
Topic: LU 17-01 Concept of Depreciation and the Straight-Line Method
Learning Objective: 17-01 (1) Explain the concept and causes of depreciation.
Bloom's: Remember
Type: Static
Accessibility: Keyboard Navigation
30) Straight-line depreciation does not:
A) Use residual to calculate yearly depreciation
B) Have a book value
C) Accelerate depreciation
D) Let the cost remain the same
E) None of these
Difficulty: 1 Easy
Topic: LU 17-01 Concept of Depreciation and the Straight-Line Method
Learning Objective: 17-01 (2) Prepare a depreciation schedule and calculate partial-year depreciation.
Bloom's: Remember
Type: Static
Accessibility: Keyboard Navigation
31) Book value is:
A) Cost plus accumulated depreciation
B) Cost minus accumulated depreciation
C) Cost divided by accumulated depreciation
D) Cost times accumulated depreciation
E) None of these
Difficulty: 1 Easy
Topic: LU 17-01 Concept of Depreciation and the Straight-Line Method
Learning Objective: 17-01 (1) Explain the concept and causes of depreciation.
Bloom's: Remember
Type: Static
Accessibility: Keyboard Navigation
32) Which one is not based on the passage of time?
A) Straight-line method
B) Declining-balance method
C) Units-of-production method
D) None of these
E) All of these
Difficulty: 2 Medium
Topic: LU 17-02 Units-of-Production Method
Learning Objective: 17-02 (1) Explain how use affects the units-of-production method.
Bloom's: Remember
Type: Static
Accessibility: Keyboard Navigation
33) For partial-years depreciation, if an asset is purchased on February 8, how many months' depreciation will be taken for the year?
A) 12
B) 11
C) 10
D) 9
E) None of these
Difficulty: 2 Medium
Topic: LU 17-01 Concept of Depreciation and the Straight-Line Method
Learning Objective: 17-01 (2) Prepare a depreciation schedule and calculate partial-year depreciation.
Bloom's: Understand
Type: Static
Accessibility: Keyboard Navigation
34) Depreciation expense in the declining-balance method is calculated by the depreciation rate:
A) Times book value at beginning of year
B) Plus book value at end of year
C) Divided by book value at beginning of year
D) Times accumulated depreciation at year end
E) None of these
Difficulty: 2 Medium
Topic: LU 17-03 Declining-Balance Method
Learning Objective: 17-03 (1) Explain the importance of residual value in the depreciation schedule.
Bloom's: Understand
Type: Static
Accessibility: Keyboard Navigation
35) Which method does not deduct residual value in calculating depreciation expense?
A) Straight-line method
B) Units-of-production method
C) Declining-balance method
D) None of these
E) All of these
Difficulty: 1 Easy
Topic: LU 17-03 Declining-Balance Method
Learning Objective: 17-03 (1) Explain the importance of residual value in the depreciation schedule.
Bloom's: Remember
Type: Static
Accessibility: Keyboard Navigation
36) If a car is depreciated in four years, the rate of depreciation using twice the straight-line rate is:
A) 25%
B) 50%
C) 100%
D) 75%
E) None of these
Difficulty: 2 Medium
Topic: LU 17-03 Declining-Balance Method
Learning Objective: 17-03 (2) Prepare a depreciation schedule.
Bloom's: Understand
Type: Static
Accessibility: Keyboard Navigation
37) Depreciation expense is located on the:
A) Income statement
B) Balance sheet
C) Income statement and Balance sheet
D) None of these
E) All of these
Difficulty: 1 Easy
Topic: LU 17-01 Concept of Depreciation and the Straight-Line Method
Learning Objective: 17-01 (1) Explain the concept and causes of depreciation.
Bloom's: Remember
Type: Static
Accessibility: Keyboard Navigation
38) Cost recovery using MACRS is calculated by:
A) Rate divided by cost
B) Rate × cost
C) Rate + cost
D) Rate - cost
E) None of these
Difficulty: 1 Easy
Topic: LU 17-04 Modified Accelerated Cost Recovery System (MACRS) with Introduction to ACRS (1986, 1989, 2010, 2017)
Learning Objective: 17-04 (1) Explain the goals of ACRS and MACRS and their limitations.
Bloom's: Remember
Type: Static
Accessibility: Keyboard Navigation
39) A truck costs $16,000 with a residual value of $1,000. It has an estimated useful life of five years. If the truck was bought on July 3, what would be the book value at the end of year 1 using straight-line rate?
A) $16,000
B) $12,500
C) $14,500
D) $1,500
E) None of these
Difficulty: 3 Hard
Topic: LU 17-01 Concept of Depreciation and the Straight-Line Method
Learning Objective: 17-01 (2) Prepare a depreciation schedule and calculate partial-year depreciation.
Bloom's: Apply
Type: Static
Accessibility: Keyboard Navigation
40) A new truck costing $50,000 with a residual value of $4,000 has an estimated useful life of five years. Using the declining-balance method at twice the straight-line rate, the depreciation expense in year 2 is:
A) $20,000
B) $12,000
C) $18,000
D) $7,200
E) None of these
Difficulty: 3 Hard
Topic: LU 17-03 Declining-Balance Method
Learning Objective: 17-03 (2) Prepare a depreciation schedule.
Bloom's: Apply
Type: Static
Accessibility: Keyboard Navigation
41) A truck costs $8,000 with a residual value of $1,000. The truck is expected to have a useful life of 70,000 miles. Assuming the truck is driven 15,000 miles the first year, the depreciation expense would be:
A) $1,714
B) $1,500
C) $1,174
D) $1,505
E) None of these
Difficulty: 3 Hard
Topic: LU 17-02 Units-of-Production Method
Learning Objective: 17-02 (2) Prepare a depreciation schedule.
Bloom's: Apply
Type: Static
Accessibility: Keyboard Navigation
42) A new piece of equipment costs $18,000 with a residual value of $600 and an estimated useful life of five years. Assuming twice the straight-line rate, the book value at the end of year 2 using the declining-balance method is:
A) $7,200
B) $6,480
C) $11,520
D) $18,000
E) None of these
Difficulty: 3 Hard
Topic: LU 17-03 Declining-Balance Method
Learning Objective: 17-03 (2) Prepare a depreciation schedule.
Bloom's: Apply
Type: Static
Accessibility: Keyboard Navigation
43) A truck costs $9,200 with a residual value of $1,000. It is estimated that the useful life of the truck is four years. The amount of depreciation expense in year 2 using the declining-balance method at twice the straight-line rate is:
A) $2,200
B) $4,400
C) $3,200
D) $6,400
E) None of these
Difficulty: 3 Hard
Topic: LU 17-03 Declining-Balance Method
Learning Objective: 17-03 (2) Prepare a depreciation schedule.
Bloom's: Apply
Type: Static
Accessibility: Keyboard Navigation
44) A truck costs $35,000 with a residual value of $2,000. Its service life is five years. Using the declining-balance method at twice the straight-line rate, the book value at the end of year 2 is:
A) $35,000
B) $22,000
C) $12,600
D) $33,000
E) None of these
Difficulty: 3 Hard
Topic: LU 17-03 Declining-Balance Method
Learning Objective: 17-03 (1) Explain the importance of residual value in the depreciation schedule.
Bloom's: Apply
Type: Static
Accessibility: Keyboard Navigation
45) A new truck costing $60,000 with a residual value of $6,000 has an estimated useful life of five years. Using the declining-balance method at twice the straight-line rate, the depreciation expense in year 2 is:
A) $24,000
B) $14,000
C) $14,400
D) $2,400
E) None of these
Difficulty: 3 Hard
Topic: LU 17-03 Declining-Balance Method
Learning Objective: 17-03 (1) Explain the importance of residual value in the depreciation schedule.
Bloom's: Apply
Type: Static
Accessibility: Keyboard Navigation
46) What is the depreciation expense for the first year straight-line method using the following?
Cost of Car | $26,000 |
Residual Value | $6,000 |
Life | 5 years |
A) $4,400
B) $5,200
C) $4,000
D) $6,000
E) None of these
Difficulty: 3 Hard
Topic: LU 17-01 Concept of Depreciation and the Straight-Line Method
Learning Objective: 17-01 (2) Prepare a depreciation schedule and calculate partial-year depreciation.
Bloom's: Apply
Type: Static
Accessibility: Keyboard Navigation
47) What is the depreciation expense for the second year (straight-line method) using the following?
Cost of equipment | $14,000 |
Residual value | $500 |
Life | 4 years |
A) $14,500
B) $13,500
C) $3,375
D) $3,275
E) None of these
Difficulty: 3 Hard
Topic: LU 17-01 Concept of Depreciation and the Straight-Line Method
Learning Objective: 17-01 (2) Prepare a depreciation schedule and calculate partial-year depreciation.
Bloom's: Apply
Type: Static
Accessibility: Keyboard Navigation
48) Federal Express bought material handling equipment for its hub operations that cost $180,000. Using the MACRS, what is the depreciation expense in year 3 (using a five-year class)?
A) $15,360
B) $40,000
C) $43,560
D) $34,560
E) None of these
Difficulty: 3 Hard
Topic: LU 17-04 Modified Accelerated Cost Recovery System (MACRS) with Introduction to ACRS (1986, 1989, 2010, 2017)
Learning Objective: 17-04 (2) Calculate depreciation using the MACRS guidelines.
Bloom's: Apply
Type: Static
Accessibility: Keyboard Navigation
49) Roche Biotech provides company cars for its salespeople that cost an average of $25,000. Using the class recovery system of five years, what is the depreciation expense in year 2 of the MACRS?
A) $8,000
B) $25,000
C) $17,000
D) $5,000
E) None of these
Difficulty: 3 Hard
Topic: LU 17-04 Modified Accelerated Cost Recovery System (MACRS) with Introduction to ACRS (1986, 1989, 2010, 2017)
Learning Objective: 17-04 (2) Calculate depreciation using the MACRS guidelines.
Bloom's: Apply
Type: Static
Accessibility: Keyboard Navigation
50) Using the straight-line method, what is the depreciation expense for a computer that cost $4,500, has a residual value of $700, and has a life of four years?
A) $1,125
B) $950
C) $1,300
D) $1,950
E) None of these
Difficulty: 3 Hard
Topic: LU 17-01 Concept of Depreciation and the Straight-Line Method
Learning Objective: 17-01 (2) Prepare a depreciation schedule and calculate partial-year depreciation.
Bloom's: Apply
Type: Static
Accessibility: Keyboard Navigation
Match the following terms with their definitions.
A) Residual value not deducted in calculation
B) Even amount of depreciation expense each year
C) Depreciation based on usage
D) Depreciation that has been built up
E) An allocation of the cost of an asset
F) Estimated life of asset
G) Cost minus accumulated depreciation
H) 1 divided by number of years of expected life
I) A table showing depreciation allocation
J) Estimated value after AFIC depreciation taken
K) Result of Tax Reform Act of 1986
L) Salvage value
51) Units-of-production method
Difficulty: 1 Easy
Topic: LU 17-01 Concept of Depreciation and the Straight-Line Method; LU 17-02 Units-of-Production Method; LU 17-03 Declining-Balance Method; LU 17-04 Modified Accelerated Cost Recovery System (MACRS) with Introduction to ACRS (1986, 1989, 2010, 2017)
Learning Objective: 17-01 (1) Explain the concept and causes of depreciation.; 17-01 (2) Prepare a depreciation schedule and calculate partial-year depreciation.; 17-02 (1) Explain how use affects the units-of-production method.; 17-03 (1) Explain the importance of residual value in the depreciation schedule.; 17-04 (1) Explain the goals of ACRS and MACRS and their limitations.
Bloom's: Remember
Type: Static
Accessibility: Keyboard Navigation
52) Useful life
Difficulty: 1 Easy
Topic: LU 17-01 Concept of Depreciation and the Straight-Line Method; LU 17-02 Units-of-Production Method; LU 17-03 Declining-Balance Method; LU 17-04 Modified Accelerated Cost Recovery System (MACRS) with Introduction to ACRS (1986, 1989, 2010, 2017)
Learning Objective: 17-01 (1) Explain the concept and causes of depreciation.; 17-01 (2) Prepare a depreciation schedule and calculate partial-year depreciation.; 17-02 (1) Explain how use affects the units-of-production method.; 17-03 (1) Explain the importance of residual value in the depreciation schedule.; 17-04 (1) Explain the goals of ACRS and MACRS and their limitations.
Bloom's: Remember
Type: Static
Accessibility: Keyboard Navigation
53) Depreciation
Difficulty: 1 Easy
Topic: LU 17-01 Concept of Depreciation and the Straight-Line Method; LU 17-02 Units-of-Production Method; LU 17-03 Declining-Balance Method; LU 17-04 Modified Accelerated Cost Recovery System (MACRS) with Introduction to ACRS (1986, 1989, 2010, 2017)
Learning Objective: 17-01 (1) Explain the concept and causes of depreciation.; 17-01 (2) Prepare a depreciation schedule and calculate partial-year depreciation.; 17-02 (1) Explain how use affects the units-of-production method.; 17-03 (1) Explain the importance of residual value in the depreciation schedule.; 17-04 (1) Explain the goals of ACRS and MACRS and their limitations.
Bloom's: Remember
Type: Static
Accessibility: Keyboard Navigation
54) Residual value
Difficulty: 1 Easy
Topic: LU 17-01 Concept of Depreciation and the Straight-Line Method; LU 17-02 Units-of-Production Method; LU 17-03 Declining-Balance Method; LU 17-04 Modified Accelerated Cost Recovery System (MACRS) with Introduction to ACRS (1986, 1989, 2010, 2017)
Learning Objective: 17-01 (1) Explain the concept and causes of depreciation.; 17-01 (2) Prepare a depreciation schedule and calculate partial-year depreciation.; 17-02 (1) Explain how use affects the units-of-production method.; 17-03 (1) Explain the importance of residual value in the depreciation schedule.; 17-04 (1) Explain the goals of ACRS and MACRS and their limitations.
Bloom's: Remember
Type: Static
Accessibility: Keyboard Navigation
55) Straight-line method
Difficulty: 1 Easy
Topic: LU 17-01 Concept of Depreciation and the Straight-Line Method; LU 17-02 Units-of-Production Method; LU 17-03 Declining-Balance Method; LU 17-04 Modified Accelerated Cost Recovery System (MACRS) with Introduction to ACRS (1986, 1989, 2010, 2017)
Learning Objective: 17-01 (1) Explain the concept and causes of depreciation.; 17-01 (2) Prepare a depreciation schedule and calculate partial-year depreciation.; 17-02 (1) Explain how use affects the units-of-production method.; 17-03 (1) Explain the importance of residual value in the depreciation schedule.; 17-04 (1) Explain the goals of ACRS and MACRS and their limitations.
Bloom's: Remember
Type: Static
Accessibility: Keyboard Navigation
56) MACRS
Difficulty: 1 Easy
Topic: LU 17-01 Concept of Depreciation and the Straight-Line Method; LU 17-02 Units-of-Production Method; LU 17-03 Declining-Balance Method; LU 17-04 Modified Accelerated Cost Recovery System (MACRS) with Introduction to ACRS (1986, 1989, 2010, 2017)
Learning Objective: 17-01 (1) Explain the concept and causes of depreciation.; 17-01 (2) Prepare a depreciation schedule and calculate partial-year depreciation.; 17-02 (1) Explain how use affects the units-of-production method.; 17-03 (1) Explain the importance of residual value in the depreciation schedule.; 17-04 (1) Explain the goals of ACRS and MACRS and their limitations.
Bloom's: Remember
Type: Static
Accessibility: Keyboard Navigation
57) Declining-balance method
Difficulty: 1 Easy
Topic: LU 17-01 Concept of Depreciation and the Straight-Line Method; LU 17-02 Units-of-Production Method; LU 17-03 Declining-Balance Method; LU 17-04 Modified Accelerated Cost Recovery System (MACRS) with Introduction to ACRS (1986, 1989, 2010, 2017)
Learning Objective: 17-01 (1) Explain the concept and causes of depreciation.; 17-01 (2) Prepare a depreciation schedule and calculate partial-year depreciation.; 17-02 (1) Explain how use affects the units-of-production method.; 17-03 (1) Explain the importance of residual value in the depreciation schedule.; 17-04 (1) Explain the goals of ACRS and MACRS and their limitations.
Bloom's: Remember
Type: Static
Accessibility: Keyboard Navigation
58) Straight-line rate
Difficulty: 1 Easy
Topic: LU 17-01 Concept of Depreciation and the Straight-Line Method; LU 17-02 Units-of-Production Method; LU 17-03 Declining-Balance Method; LU 17-04 Modified Accelerated Cost Recovery System (MACRS) with Introduction to ACRS (1986, 1989, 2010, 2017)
Learning Objective: 17-01 (1) Explain the concept and causes of depreciation.; 17-01 (2) Prepare a depreciation schedule and calculate partial-year depreciation.; 17-02 (1) Explain how use affects the units-of-production method.; 17-03 (1) Explain the importance of residual value in the depreciation schedule.; 17-04 (1) Explain the goals of ACRS and MACRS and their limitations.
Bloom's: Remember
Type: Static
Accessibility: Keyboard Navigation
59) Accumulated depreciation
Difficulty: 1 Easy
Topic: LU 17-01 Concept of Depreciation and the Straight-Line Method; LU 17-02 Units-of-Production Method; LU 17-03 Declining-Balance Method; LU 17-04 Modified Accelerated Cost Recovery System (MACRS) with Introduction to ACRS (1986, 1989, 2010, 2017)
Learning Objective: 17-01 (1) Explain the concept and causes of depreciation.; 17-01 (2) Prepare a depreciation schedule and calculate partial-year depreciation.; 17-02 (1) Explain how use affects the units-of-production method.; 17-03 (1) Explain the importance of residual value in the depreciation schedule.; 17-04 (1) Explain the goals of ACRS and MACRS and their limitations.
Bloom's: Remember
Type: Static
Accessibility: Keyboard Navigation
60) Book value
Difficulty: 1 Easy
Topic: LU 17-01 Concept of Depreciation and the Straight-Line Method; LU 17-02 Units-of-Production Method; LU 17-03 Declining-Balance Method; LU 17-04 Modified Accelerated Cost Recovery System (MACRS) with Introduction to ACRS (1986, 1989, 2010, 2017)
Learning Objective: 17-01 (1) Explain the concept and causes of depreciation.; 17-01 (2) Prepare a depreciation schedule and calculate partial-year depreciation.; 17-02 (1) Explain how use affects the units-of-production method.; 17-03 (1) Explain the importance of residual value in the depreciation schedule.; 17-04 (1) Explain the goals of ACRS and MACRS and their limitations.
Bloom's: Remember
Type: Static
Accessibility: Keyboard Navigation
61) Depreciation schedule
Difficulty: 1 Easy
Topic: LU 17-01 Concept of Depreciation and the Straight-Line Method; LU 17-02 Units-of-Production Method; LU 17-03 Declining-Balance Method; LU 17-04 Modified Accelerated Cost Recovery System (MACRS) with Introduction to ACRS (1986, 1989, 2010, 2017)
Learning Objective: 17-01 (1) Explain the concept and causes of depreciation.; 17-01 (2) Prepare a depreciation schedule and calculate partial-year depreciation.; 17-02 (1) Explain how use affects the units-of-production method.; 17-03 (1) Explain the importance of residual value in the depreciation schedule.; 17-04 (1) Explain the goals of ACRS and MACRS and their limitations.
Bloom's: Remember
Type: Static
Accessibility: Keyboard Navigation
62) Trade-in
Difficulty: 1 Easy
Topic: LU 17-01 Concept of Depreciation and the Straight-Line Method; LU 17-02 Units-of-Production Method; LU 17-03 Declining-Balance Method; LU 17-04 Modified Accelerated Cost Recovery System (MACRS) with Introduction to ACRS (1986, 1989, 2010, 2017)
Learning Objective: 17-01 (1) Explain the concept and causes of depreciation.; 17-01 (2) Prepare a depreciation schedule and calculate partial-year depreciation.; 17-02 (1) Explain how use affects the units-of-production method.; 17-03 (1) Explain the importance of residual value in the depreciation schedule.; 17-04 (1) Explain the goals of ACRS and MACRS and their limitations.
Bloom's: Remember
Type: Static
Accessibility: Keyboard Navigation
Answers: 51) C 52) F 53) E 54) J 55) B 56) K 57) A 58) H 59) D 60) G 61) I 62) L
63) Complete the following (use the straight-line method):
Auto: $40,000; Residual: $4,000; Estimated Life: 5 Yrs
Year | Cost | Depreciation Expense | Accumulated Depreciation | Book Value |
1 | A | B | C | D |
2 | E | F | G | H |
3 | I | J | K | L |
A. $40,000;
B. $36,000/5 = $7,200;
C. $7,200 × 1 = $7,200;
D. $40,000 - $7,200 = $32,800;
E. $40,000;
F. $36,000/5 = $7,200;
G. $7,200 × 2 = $14,400;
H. $40,000 - $14,400 = $25,600;
I. $40,000;
J. $36,000/5 = $7,200;
K. $7,200 × 3 = $21,600;
L. $40,000 - $21,600 = $18,400.
Difficulty: 3 Hard
Topic: LU 17-01 Concept of Depreciation and the Straight-Line Method
Learning Objective: 17-01 (2) Prepare a depreciation schedule and calculate partial-year depreciation.
Bloom's: Apply
Type: Static
Accessibility: Keyboard Navigation
64) Using the declining-balance method, complete the table as shown (twice the straight-line rate):
Auto: $29,000; Residual: $2,000; Estimated Life: 5 Yrs
Year | Cost | Accumulated Depreciation B.O.Y. | Book Value B.O.Y | Depreciation Expense | Accumulated Depreciation E.O.Y. | Book Value E.O.Y |
1 | A | B | C | D | E | F |
2 | G | H | I | J | K | L |
3 | M | N | O | P | Q | R |
A. $29,000; B. $0; C. $29,000; D. $29,000 × .4 = $11,600; E. $11,600; F. $29,000 - $11,600 = $17,400;
G. $29,000; H. $11,600; I. $17,400; J. $17,400 × .4 = $6,960; K. $6,960 + $11,600 = $18,560; L. $17,400 - $6,960 = $10,440; M. $29,000; N. $18,560; O. $10,440; P. $10,440 × .4 = $4,176; Q. $4,176 + $6,960 + $11,600 = $22,736; R. $10,440 - 4,176 = $6,264.
Difficulty: 3 Hard
Topic: LU 17-03 Declining-Balance Method
Learning Objective: 17-03 (2) Prepare a depreciation schedule.
Bloom's: Apply
Type: Static
Accessibility: Keyboard Navigation
65) Complete:
Method Purchased | Cost | Recovery Class | Recovery Year | Cost Recovery |
MACRS July 20 | $5,000 | 7 | 6 | A |
MACRS Nov 5 | $11,000 | 20 | 13 | B |
A. Table 17-5; $5,000 × .0893 = $446.50; B. $11,000 × .0446 = $490.60.
Difficulty: 3 Hard
Topic: LU 17-04 Modified Accelerated Cost Recovery System (MACRS) with Introduction to ACRS (1986, 1989, 2010, 2017)
Learning Objective: 17-04 (2) Calculate depreciation using the MACRS guidelines.
Bloom's: Apply
Type: Static
Accessibility: Keyboard Navigation
66) Johnson Company bought a light general purpose truck for $20,000. Calculate the yearly depreciation using MACRS (5-year class) for the first three years.
Table 17-5; $20,000 × .20 = $4,000; $20,000 × .32 = $6,400; $20,000 × .1920 = $3,840.
Difficulty: 3 Hard
Topic: LU 17-04 Modified Accelerated Cost Recovery System (MACRS) with Introduction to ACRS (1986, 1989, 2010, 2017)
Learning Objective: 17-04 (2) Calculate depreciation using the MACRS guidelines.
Bloom's: Apply
Type: Static
Accessibility: Keyboard Navigation
67) Adjax bought a machine for $86,000. Its estimated life is 10 years with a residual value of $6,000. Using the straight-line method, what is the book value of the machine at the end of year 2?
$86,000 - $6,000 = $80,000 × .1 = $8,000; $86,000 - $8,000 - $8,000 = $70,000.
Difficulty: 3 Hard
Topic: LU 17-01 Concept of Depreciation and the Straight-Line Method
Learning Objective: 17-01 (2) Prepare a depreciation schedule and calculate partial-year depreciation
Bloom's: Apply
Type: Static
Accessibility: Keyboard Navigation
68) A truck costing $25,000 with a residual value of $5,000 was purchased by Rim Corporation. The truck's estimated life is 10 years. At the end of year 2 what is the book value using the declining-balance method? Assume a depreciation rate of twice the straight-line rate.
$25,000 × .2 = $5,000; $25,000 - $5,000 = $20,000; $20,000 × .2 = $4,000; $4,000 + $5,000 = $9,000; $25,000 - $9,000 = $16,000.
Difficulty: 3 Hard
Topic: LU 17-03 Declining-Balance Method
Learning Objective: 17-03 (2) Prepare a depreciation schedule.
Bloom's: Apply
Type: Static
Accessibility: Keyboard Navigation
69) Joe Wong, owner of Cookie Palace, is discussing with his accountant which method of depreciation would be best for his new delivery truck. The cost of the truck is $20,000 with an estimated life of four years. The residual value of the truck is $2,500. Prepare a depreciation schedule using the declining-balance method at twice the straight-line rate.
End of Year | Cost of Truck | Accumulated Depreciation | Book Value B.O.Y. | Depreciation Expense | Accumulated Depr E.O.Y. | Book Value E.O.Y |
1 | $20,000 | $0 | $20,000 | $10,000 | $10,000 | $10,000 |
2 | $20,000 | $10,000 | $10,000 | $5,000 | $15,000 | $5,000 |
3 | $20,000 | $15,000 | $5,000 | $2,500 | $17,500 | $2,500 |
4 | Cannot depreciation in Year 4 since residual value of $2,500 was reached in Year 3 | |||||
Depr Exp 1 = .5 × $20,000 = $10,000;
Acc Dep 1 = 0 + $10,000 = $10,000;
Book Value 1 = $20,000 - $10,000 = $10,000;
Acc Depr 2 = $10,000;
Book Value BOY 2 = $10,000;
Depr Exp 2 = $10,000 × .5 = $5,000;
Acc Depr EOY 2 = $10,000 + $5,000 = $15,000;
Book Value EOY 2 = $10,000 - $5,000 = $5,000;
Acc Depr 3 = $10,000 + $5,000 = $15,000;
Book Value BOY 3 = $5,000;
Depr Exp 3 = $5,000 × .5 = $2,500;
Acc Depr EOY 3 = $2,500 + $5,000 + $10,000 = $17,500;
Book Value EOY 3 = $5,000 - $2,500 = $2,500.
Difficulty: 3 Hard
Topic: LU 17-03 Declining-Balance Method
Learning Objective: 17-03 (2) Prepare a depreciation schedule.
Bloom's: Apply
Type: Static
Accessibility: Keyboard Navigation
70) Using MACRS 7 year class, what is depreciation in year 2 on furniture costing $12,000?
Table 17-5; $12,000 × .2449 = $2,938.80.
Difficulty: 2 Medium
Topic: LU 17-04 Modified Accelerated Cost Recovery System (MACRS) with Introduction to ACRS (1986, 1989, 2010, 2017)
Learning Objective: 17-04 (2) Calculate depreciation using the MACRS guidelines.
Bloom's: Understand
Type: Static
Accessibility: Keyboard Navigation
71) Young Corporation bought a car with an estimated life of five years for $25,000. The residual value of the car is $5,000. After three years, the car was sold for $11,000. What was the difference between book value and selling price if Young used the straight-line method of depreciation?
($25,000 - $5,000) / 5 = $4,000; $4,000 × 3 = $12,000; $25,000 - $12,000 = $13,000 = Book Value; $13,000 - $11,000 (selling price) = $2,000.
Difficulty: 3 Hard
Topic: LU 17-01 Concept of Depreciation and the Straight-Line Method
Learning Objective: 17-01 (2) Prepare a depreciation schedule and calculate partial-year depreciation.
Bloom's: Apply
Type: Static
Accessibility: Keyboard Navigation
72) Using the declining-balance method, complete the table as shown (twice the straight-line rate):
Auto: $26,000; Residual Value: $600; Estimated Life: 10 Yrs
Year | Cost | Accumulated Depreciation B.O.Y. | Book Value B.O.Y | Depreciation Expense | Accumulated Depreciation E.O.Y. | Book Value E.O.Y |
1 | A | B | C | D | E | F |
2 | G | H | I | J | K | L |
3 | M | N | O | P | Q | R |
A. $26,000; B. $0; C. $26,000; D. $26,000 × .2 = $5,200; E. $5,200; F. $26,000 - $5,200 = $20,800; G. $26,000; H. $5,200; I. $20,800; J. $20,800 × .2 = $4,160; K. $4,160 + $5,200 = $9,360; L. $20,800 - $4,160 = $16,640; M. $26,000; N. $9,360; O. $16,640; P. $16,640 × .2 = $3,328; Q. $3,328 + $4,160 + $5,200 = $12,688; R. $26,000 - $12,688 = $13,312.
Difficulty: 3 Hard
Topic: LU 17-03 Declining-Balance Method
Learning Objective: 17-03 (2) Prepare a depreciation schedule.
Bloom's: Apply
Type: Static
Accessibility: Keyboard Navigation
73) Using the declining-balance method, complete the table as shown (twice the straight-line rate):
Auto: $30,000
Estimated life: 5 years
Residual value: $800
Year | Cost | Accumulated Depreciation B.O.Y. | Book Value B.O.Y | Depreciation Expense | Accumulated Depreciation E.O.Y. | Book Value E.O.Y |
1 | $30,000 | A | B | C | D | E |
2 | $30,000 | F | G | H | I | J |
3 | $30,000 | K | L | M | N | O |
A. $0; B. $30,000; C. $30,000 × .4 = $12,000; D. $12,000; E. $30,000 - $12,000 = $18,000; F. $12,000; G. $18,000; H. $18,000 × .4 = $7,200; I. $7,200 + $12,000 = $19,200; J. $18,000 - $7,200 = $10,800; K. $19,200; L. $10,800; M. $10,800 × .4 = $4,320; N. $4,320 + $7,200 + $12,000 = $23,520; O. $10,800 - $4,320 = $6,480.
Difficulty: 3 Hard
Topic: LU 17-03 Declining-Balance Method
Learning Objective: 17-03 (2) Prepare a depreciation schedule.
Bloom's: Apply
Type: Static
Accessibility: Keyboard Navigation
74) Find the Annual Recovery for Year 1.
Method | Purchased | Cost | Recovery Class | Annual Recovery for Year 1 |
MACRS | July 8 | $6,000 | 5 | A |
Table 17-5; $6,000 × .2 = $1,200.
Difficulty: 2 Medium
Topic: LU 17-04 Modified Accelerated Cost Recovery System (MACRS) with Introduction to ACRS (1986, 1989, 2010, 2017)
Learning Objective: 17-04 (2) Calculate depreciation using the MACRS guidelines.
Bloom's: Understand
Type: Static
Accessibility: Keyboard Navigation
75) Find the Annual Recovery for Year 1.
Method | Purchased | Cost | Recovery Class | Annual Recovery for Year 1 |
MACRS | Nov 5 | $12,000 | 3 | A |
Table 17-5; $12,000 × .33 = $3,960.
Difficulty: 2 Medium
Topic: LU 17-04 Modified Accelerated Cost Recovery System (MACRS) with Introduction to ACRS (1986, 1989, 2010, 2017)
Learning Objective: 17-04 (2) Calculate depreciation using the MACRS guidelines.
Bloom's: Understand
Type: Static
Accessibility: Keyboard Navigation
76) Find the Annual Recovery for Year 1.
Method | Purchased | Cost | Recovery Class | Annual Recovery for Year 1 |
MACRS | May 3 | $18,000 | 3 | A |
Table 17-5; $18,000 × .33 = $5,940.
Difficulty: 2 Medium
Topic: LU 17-04 Modified Accelerated Cost Recovery System (MACRS) with Introduction to ACRS (1986, 1989, 2010, 2017)
Learning Objective: 17-04 (2) Calculate depreciation using the MACRS guidelines.
Bloom's: Understand
Type: Static
Accessibility: Keyboard Navigation
77) Find the Annual Recovery for Year 1.
Method | Purchased | Cost | Recovery Class | Annual Recovery for Year 1 |
MACRS | July 15 | $21,000 | 10 | A |
$21,000 × .10 = $2,100.
Difficulty: 2 Medium
Topic: LU 17-04 Modified Accelerated Cost Recovery System (MACRS) with Introduction to ACRS (1986, 1989, 2010, 2017)
Learning Objective: 17-04 (2) Calculate depreciation using the MACRS guidelines.
Bloom's: Understand
Type: Static
Accessibility: Keyboard Navigation
78) Apple Co. bought a car with an estimated life of five years for $12,000. The residual value of the car is $2,000. What will be the amount of depreciation expense each year using the straight-line method? If the car was bought on April 3, what would be the depreciation for the first year?
($12,000 - $2,000) / 5 = $2,000 depr exp per yr; 9/12 × $2,000 = $1,500.
Difficulty: 3 Hard
Topic: LU 17-01 Concept of Depreciation and the Straight-Line Method
Learning Objective: 17-01 (2) Prepare a depreciation schedule and calculate partial-year depreciation.
Bloom's: Apply
Type: Static
Accessibility: Keyboard Navigation
79) Jay Corp. bought a machine for $15,000. The machine is expected to produce 10,000 units. The machine has a residual value of $5,000. Assuming the machine produces 400 units during year 1, what should the depreciation expense be?
($15,000 - $5,000)/10,000 = $1.00 per unit; 400 × $1.00 = $400 depreciation expense.
Difficulty: 3 Hard
Topic: LU 17-02 Units-of-Production Method
Learning Objective: 17-02 (2 Prepare a depreciation schedule.
Bloom's: Apply
Type: Static
Accessibility: Keyboard Navigation
80) Martha Run buys a new duplicating machine for $20,000 with a residual value of $2,000. Its estimated life is five years. Using the declining-balance method, calculate the book value at the end of year 1, assuming twice the straight-line rate.
$20,000 × .4 = $8,000; $20,000 - $8,000 = $12,000.
Difficulty: 3 Hard
Topic: LU 17-03 Declining-Balance Method
Learning Objective: 17-03 (2) Prepare a depreciation schedule
Bloom's: Apply
Type: Static
Accessibility: Keyboard Navigation
81) John Morse Corporation buys a van for $16,000. The estimated life of the van is four years. The residual value of the van is $4,000. After two years, the van is sold for $8,000. What was the difference between the book value and the amount received from selling the van if John used the straight-line method of depreciation?
$16,000 - $4,000 = $12,000; $12,000 × .25 = $3,000; $3,000 × 2 years = $6,000;
$16,000 - $6,000 = $10,000; $10,000 - $8,000 = $2,000.
Difficulty: 3 Hard
Topic: LU 17-01 Concept of Depreciation and the Straight-Line Method
Learning Objective: 17-01 (2) Prepare a depreciation schedule and calculate partial-year depreciation.
Bloom's: Apply
Type: Static
Accessibility: Keyboard Navigation
82) Bob bought a new delivery truck for his drug store for $30,000. The residual value is $3,000 with an expected life of five years. Assuming twice the straight-line rate, calculate the book value at the end of year 2 for the declining-balance method.
Year | Cost | Book Value B.O.Y. | Depreciation Expense | Accumulated Depreciation | Book Value E.O.Y. |
1 | $30,000 | $30,000 | $30,000 × .4 = $12,000 | $12,000 | $30,000 - $12,000 = $18,000 |
2 | $30,000 | $18,000 | $18,000 × .4 = $7,200 | $7,200 + $12,000 = $19,200 | $18,000 - $7,200 = $10,800 |
Difficulty: 3 Hard
Topic: LU 17-03 Declining-Balance Method
Learning Objective: 17-03 (2) Prepare a depreciation schedule.
Bloom's: Apply
Type: Static
Accessibility: Keyboard Navigation
83) Karen Knoll Co. bought a machine that cost $8,000. The residual value is $1,000, and the machine life is estimated at four years. Can you prepare a depreciation schedule assuming twice the straight-line rate? Karen uses the declining-balance method.
Year | Cost | Book Value B. O. Y. | Depreciation Expense | Accumulated Depreciation | Book Value E.O.Y. |
1 | $8,000 | $8,000 | $4,000 | $4,000 | $4,000 |
2 | $8,000 | $4,000 | $2,000 | $6,000 | $2,000 |
3 | $8,000 | $2,000 | $1,000 | $7,000 | $1,000 |
4 | No depreciation expense in year 4 since cannot depr below residual value. | ||||
Depr Exp 1:$8,000 × .5 = $4,000; Book Value 1: $8,000 - $4,000 = $4,000;
Depr Exp 2: $4,000 × .5 = $2,000; Acc Depr 2: $2,000 + $4,000 = $6,000; Book Value 2: $4,000 - $2,000 = $2,000;
Depr Exp 3: $2,000 × .5 = $1,000; Acc Depr 3: $1,000 + $2,000 + $4,000 = $7,000;
Book Value 3: $2,000 - $1,000 = $1,000.
Difficulty: 3 Hard
Topic: LU 17-03 Declining-Balance Method
Learning Objective: 17-03 (2) Prepare a depreciation schedule.
Bloom's: Apply
Type: Static
Accessibility: Keyboard Navigation
84) Bill Murray bought fixtures (seven-year class) for $13,000. Using MACRS, what is the depreciation expense in year 2?
Table 17-5; $13,000 × .2449 = $3,183.70.
Difficulty: 2 Medium
Topic: LU 17-04 Modified Accelerated Cost Recovery System (MACRS) with Introduction to ACRS (1986, 1989, 2010, 2017)
Learning Objective: 17-04 (2) Calculate depreciation using the MACRS guidelines.
Bloom's: Understand
Type: Static
Accessibility: Keyboard Navigation
85) The Life Sciences Division purchased new equipment for manufacturing products. The cost of the new machinery was $160,000. Using a five-year class, what is the expense in year 3 of the MACRS?
Table 17-5; $160,000 × .1920 = $30,720
Difficulty: 2 Medium
Topic: LU 17-04 Modified Accelerated Cost Recovery System (MACRS) with Introduction to ACRS (1986, 1989, 2010, 2017)
Learning Objective: 17-04 (2) Calculate depreciation using the MACRS guidelines.
Bloom's: Understand
Type: Static
Accessibility: Keyboard Navigation
86) Using a straight-line depreciation schedule, at what amount is the company depreciating its equipment if the cost of the equipment is $45,000 and it has a residual value of $5,000 with a useful life of four years?
$45,000 - $5,000 = $40,000; $40,000 / 4 = $10,000 per year.
Difficulty: 3 Hard
Topic: LU 17-01 Concept of Depreciation and the Straight-Line Method
Learning Objective: 17-01 (2) Prepare a depreciation schedule and calculate partial-year depreciation.
Bloom's: Apply
Type: Static
Accessibility: Keyboard Navigation
87) If Boeing depreciates its equipment that cost $120,000 over six years, using a straight-line depreciation schedule, at what rate is it reducing its value by each year, assuming there is no residual value?
$120,000 / 6 = $20,000.
Difficulty: 2 Medium
Topic: LU 17-01 Concept of Depreciation and the Straight-Line Method
Learning Objective: 17-01 (2) Prepare a depreciation schedule and calculate partial-year depreciation.
Bloom's: Understand
Type: Static
Accessibility: Keyboard Navigation
88) Tom purchased a condo in Mississippi for rental property at a cost of $106,600. Using the class recovery period for assets, how many years will he be able to depreciate the property and what is the amount each year?
Table 17-4; $106,600 / 27.5 years = $3,876.36.
Difficulty: 3 Hard
Topic: LU 17-04 Modified Accelerated Cost Recovery System (MACRS) with Introduction to ACRS (1986, 1989, 2010, 2017)
Learning Objective: 17-04 (2) Calculate depreciation using the MACRS guidelines.
Bloom's: Apply
Type: Static
Accessibility: Keyboard Navigation
89) Hank bought a four-family residence for rental property. Hank put 20% down on the $300,000 rental unit. How much will he be able to depreciate using the class recovery period for residential rental property each year?
Table 17-4; $300,000 / 27.5 years = $10,909.09.
Difficulty: 3 Hard
Topic: LU 17-04 Modified Accelerated Cost Recovery System (MACRS) with Introduction to ACRS (1986, 1989, 2010, 2017)
Learning Objective: 17-04 (2) Calculate depreciation using the MACRS guidelines.
Bloom's: Apply
Type: Static
Accessibility: Keyboard Navigation
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