What is the book value at the end of the third year

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Englehard purchases a slurry-based separator for the mining of the clay that costs $550,000 and has an estimated useful life of 10 years, a MACRS-GDS property class of 7 years, and an estimated salvage value of $90,000 after 10 years. It was financed using a $185,000 down payment and a loan of $365,000 over a period of 5 years with interest at 10%. Loan payments are made in equal annual amounts (principal plus interest) over the 5 years.

a. What is the amount of the MACRS-GDS depreciation taken in the 3rd year?

Depreciation = $

b. What is the book value at the end of the 3rd year?

Book value = $

c. Returning to the original situation, what is the amount of the MACRS-GDS depreciation taken in the 3rd year if the separator is also sold during the 3rd year?

Depreciation = $

Use depreciation percentages to 2 decimal places. Round final answers to whole dollar. Tolerance is +/- 50.

Reference no: EM131905606

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