A belt-conveyor purchased for $140,000 has shipping and installation costs of $20,000. It was expected to last 6 years, when it would be sold for $25,000 after paying $5,000 for dismantling. Instead, it lasted 4 years, and several workers were permitted to take it apart on their own time for reassembly at a private technical school. How much gain, loss, or repactured depreciation is there? Assume

(a) 7-year MACRS depreciation

(b) Straight-line depreciation

Answers:

(a) $52,479 loss w/ 50% final depr.

(b) $63,333 loss