Reference no: EM132640231

Question - A company purchased an asset for $500,000. In addition to the factory price, the following costs were incurred: sales tax of 4%; transportation costs of $40,000; and installation costs of $60,000. The depreciation life (or property class) of the asset is 5-year. The estimated resale value of the asset at the end of its depreciation period is $40,000. The asset is kept 4 years and then sold.

Required - Compute the following depreciation expenses:

1. Classical SL method, year 1 and year 4 (2 numerical values).

2. Classical 200% declining balance method, year 1 and year 2 (2 numerical values).

3. Modern MACRS, specified percentages method, year 2 and year 4 (2 numerical values).

4. Modern MACRS Alternative SL method, year 1 and year 2 (2 numerical values).