- In 2022 Leo Construction Traded In A Light Duty Pickup Truck That Had A Book Value Of 18 000 A New Pickup Truck Havin 1 (148.38 KiB) Viewed 36 times
In 2022, Leo construction traded in a light duty pickup truck that had a book value of $18,000. A new pickup truck having a fair market value of $59,766 was acquired. Because the vendor accepted the old truck as a trade-in, a deal was agreed, and Leo construction would only pay $34,015 for the new truck. Compute the third year depreciation (d3) for the new truck using the general depreciation system method. TABLE 11-1 Example Class Lives and MACRS Property Classes" IRS Asset Class 00.11 00.12 00.22 00.241 00.25 00.40 01.11 01.21 13.00 13.30 15.00 20.10 22.2 24.10 32.20 37.11 48.11 48.2 49.12 49.13 49.23 50.00 80.00 Asset Description Office furniture, fixtures, and equipment Information systems: computers/peripheral Automobiles, taxis Light general-purpose trucks Railroad cars and locomotives Industrial steam and electric distribution Cotton gin assets Cattle, breeding or dairy Offshore drilling assets Petroleum refining assets Construction assets Manufacture of grain and grain mill products Manufacture of yam, thread, and woven fabric Cutting of timber Manufacture of cement Manufacture of motor vehicles Telephone communications assets and buildings Radio and television broadcasting equipment Electric utility nuclear production plant Electric utility steam production plant Natural gas production plant Municipal wastewater treatment plant Theme and amusement park assets Class Life (years) ADR 10 6 3 4 15 22 12 7 7.5 16 6 11 24 6 20 28 14 24 12.5 MACRS Property Class (years) GDS ADS 7 5 5 5 7 15 7 5 5 10 5 10 7 5 15 7 15 5 15 20 7 15 7 10 6 5 5 15 22 12 7 7.5 COD CAEN 16 6 17 11 6 12 24 6 20 28 14 24 12.5
TABLE 11-3 MACRS Depreciation for Personal Property: Half-Year Convention Applicable Percentage for Property Class 10-Year Property Recovery Year 1 2 3 4 5 6 456 789 10 11 12 13 14 345 15 16 17 18 19 20 21 3-Year Property 33.33 44.45 14.81* 7.41 5-Year Property 20.00 32.00 19.20 11.52* 11.52 5.76 7-Year Property 14.29 24.49 17.49 12.49 8.93* 8.92 8.93 4.46 10.00 18.00 14.40 11.52 9.22 7.37 6.55* 6.55 6.56 6.55 3.28 15-Year Property 5.00 9.50 8.55 7.70 6.93 6.23 5.90* 5.90 5.91 5.90 5.91 5.90 5.91 5.90 5.91 2.95 20-Year Property 3.750 7.219 6.677 6.177 5.713 5.285 4.888 4.522 4.462* 4.461 4.462 4.461 4.462 4.461 4.462 4.461 4.462 4.461 4.462 4.461 2.231
Question 5 For the new pick-up truck in previous
question, what is the salvage value using the general depreciation system (GDS) method? 2 pts