A manufacturer of aerospace products purchased two flexible assembly cells for $520,000 each. Delivery and insurance charges were $34,000, and installation of the cells cost another $52,000. a. Determine the cost basis of the two cells. b. What is the class life of the cells? c. What is the MACRS depreciation in year three? d. If the cells are sold to another company for $140,000 each at the end of year six, how much is the recaptured depreciation? Click the icon to view the partial listing of depreciable assets used in business. Click the icon to view the GDS Recovery Rates (ru). MACRS Class Lives and Recovery Periods Recovery Periods GDS ADS Class Life O O OOoooo Asset Class 00.11 00.12 00.22 00.23 00.241 00.242 00.26 01.1 10.0 13.2 13.3 15.0 22.3 24.4 28.0 30.1 32.2 34.0 36.0 37.11 37.2 48.12 49.13 49.21 79.0 Descriptions of Assets Office furniture and equipment Information systems, including computers Automobiles, taxis Buses Light general purpose trucks Heavy general purpose trucks Tractor units for use over the road Agriculture Mining Production of petroleum and natural gas Petroleum refining Construction Manufacture of carpets Manufacture of wood products and furniture Manufacture of chemicals and allied products Manufacture of rubber products Manufacture of cement Manufacture of fabricated metal products Manufacture of electronic components, products, and systems Manufacture of motor vehicles Manufacture of aerospace products Telephone central office equipment Electric utility steam production plant Gas utility distribution facilities Recreation voorvor vvor voor vrywororor or orvo 10 9.5 14 20 10 10 Year OOOWN- GDS Recovery Rates (r) for the Six Personal Property Classes Recovery Period (and Property Class) 3-yeara 5-yeara 7-yeara 10-yeara 15-yearb 0.3333 0.2000 0.1429 0.1000 0.0500 0.4445 0.3200 0.2449 0.1800 0.0950 0.1481 0.1920 0.1749 0.1440 0.0855 0.0741 0.1152 0.1249 0.1152 0.0770 0.1152 0.0893 0.0922 0.0693 0.0576 0.0892 0.0737 0.0623 0.0893 0.0655 0.0590 0.0446 0.0655 0.0590 0.0656 0.0591 0.0655 0.0590 0.0328 0.0591 0.0590 0.0591 0.0590 0.0591 0.0295 20-yearb 0.0375 0.0722 0.0668 0.0618 0.0571 0.0528 0.0489 0.0452 0.0447 0.0447 0.0446 0.0446 0.0446 0.0446 0.0446 0.0446 0.0446 0.0446 0.0446 0.0446 0.0223 12 14 15 16 17 18 21 A manufacturer of aerospace products purchased two flexible assembly cells for $520,000 each. Delivery and insurance charges were $34,000, and installation of the cells cost another $52,000. a. Determine the cost basis of the two cells. b. What is the class life of the cells? c. What is the MACRS depreciation in year three? d. If the cells are sold to another company for $140,000 each at the end of year six, how much is the recaptured depreciation? Click the icon to view the partial listing of depreciable assets used in business. Click the icon to view the GDS Recovery Rates (ru). MACRS Class Lives and Recovery Periods Recovery Periods GDS ADS Class Life O O OOoooo Asset Class 00.11 00.12 00.22 00.23 00.241 00.242 00.26 01.1 10.0 13.2 13.3 15.0 22.3 24.4 28.0 30.1 32.2 34.0 36.0 37.11 37.2 48.12 49.13 49.21 79.0 Descriptions of Assets Office furniture and equipment Information systems, including computers Automobiles, taxis Buses Light general purpose trucks Heavy general purpose trucks Tractor units for use over the road Agriculture Mining Production of petroleum and natural gas Petroleum refining Construction Manufacture of carpets Manufacture of wood products and furniture Manufacture of chemicals and allied products Manufacture of rubber products Manufacture of cement Manufacture of fabricated metal products Manufacture of electronic components, products, and systems Manufacture of motor vehicles Manufacture of aerospace products Telephone central office equipment Electric utility steam production plant Gas utility distribution facilities Recreation voorvor vvor voor vrywororor or orvo 10 9.5 14 20 10 10 Year OOOWN- GDS Recovery Rates (r) for the Six Personal Property Classes Recovery Period (and Property Class) 3-yeara 5-yeara 7-yeara 10-yeara 15-yearb 0.3333 0.2000 0.1429 0.1000 0.0500 0.4445 0.3200 0.2449 0.1800 0.0950 0.1481 0.1920 0.1749 0.1440 0.0855 0.0741 0.1152 0.1249 0.1152 0.0770 0.1152 0.0893 0.0922 0.0693 0.0576 0.0892 0.0737 0.0623 0.0893 0.0655 0.0590 0.0446 0.0655 0.0590 0.0656 0.0591 0.0655 0.0590 0.0328 0.0591 0.0590 0.0591 0.0590 0.0591 0.0295 20-yearb 0.0375 0.0722 0.0668 0.0618 0.0571 0.0528 0.0489 0.0452 0.0447 0.0447 0.0446 0.0446 0.0446 0.0446 0.0446 0.0446 0.0446 0.0446 0.0446 0.0446 0.0223 12 14 15 16 17 18 21