5Q Finance and Acct

Robert R. Taylor School of Architecture and Construction Science

CSMT 360 - Construction Accounting and Finance Spring 2021

Homework 2

Chapter 5

Name:

NOTE: You must use proper grammar and complete sentences when answering questions in order to receive full credit.

1.Why would a company use the sum-of-the year or declining balance methods to calculate depreciation?

2. How many years does it take to depreciate a piece of equipment with a five year recovery period MACRS? Happen?

3. A piece of equipment purchased for $110,000 has an estimated salvage value of $10,000 at the end of the recovery period. Prepare a depreciation schedule for the piece of equipment using the straight-line method with a recovery period of seven years.

4. For the current tax year, 2021. are the maximum Section 179 deductions and the amount where Section 179 begins to be phased out?

5. A piece of equipment is purchased for \$40,000 and has an estimated salvage of 51, 000 at the end of the recovery period. Prepare a depreciation schedule the piece of the sum-of-the-years method with a recovery period of five years.