Please help me to solve all parts of this economics problem. It is 1 problem. Please show all work, I am having trouble understanding how to solve it. Thank you in advance!
Type or paste question here
A piece of construction equipment (asset class 15.0) was purchased by the Jones Construction Company in 2015. The cost basis was $310,000. The plan is to use the equipment and dispose it after about 8 years of service. a). Determine the MACRS-GDS and MACRS-ADS recovery periods for the equipment. b). Determine the annual GDS and ADS depreciation deductions for this property. c). If the company disposes the equipment and sells it sooner in 2017, instead of 2023, what would the the GDS and ADS depreciations for that year? d). Based on (c), what are the corresponding book values under the GDS and ADS depreciations? MACRS Class Lives and Recovery Periods Recovery Periods GDS ADS Class Life 10 6 7 5 5 5 3 10 5 5 9 5 9 4 5 6 6 4 4 10 10 14 16 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 ww4669094926208890 10 9.5 14 5 3 7 7 7 10 5 5 7 5 7 15 7 5 7 7 10 20 20 7 10 10 14 16 6 9 10 9.5 14 20 12 6 12 10 18 28 35 10 12 12 10 18 35 10 Year 1 2 3 4 5 6 7 GDS Recovery Rates (rk) for the Six Personal Property Classes Recovery Period (and Property Class) 3-year 5-year 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 8 9 10 11 12 13 14 15 16 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 17 18 19 20 21 aThese rates are determined by applying the 200% DB method (with switchover to the SL method) to the recovery period with the half-year convention applied to the first and last years. Rates for each period must sum to 1.0000. "These rates are determined with the 150% DB method instead of the 200% DB method (with switchover to the SL method) and are rounded off to four decimal places. years. a). The GDS recovery period is The ADS recovery period is years. b). Determine the GDS depreciation deductions for this property. (Round to the nearest dollar.) Year The GDS depreciation deductions, $ 2015 2016 2017 $ $ $ $ $ $ 2018 2019 2020 Determine the ADS depreciation deductions for this property. (Round to the nearest dollar.) Year The ADS depreciation deductions, $ 2015 $ 2016 $ 2017 $ 2018 $ 2019 $ 2020 $ 2021 $ c). The GDS depreciation deduction for the year 2017 would be $ (Round to the nearest dollar.) The ADS depreciation deduction for the year 2017 would be $ . (Round to the nearest dollar.) d). The book value at end of 2017 based on GDS depreciations is $ The book value at end of 2017 based on ADS depreciations is $ (Round to the nearest dollar.) A piece of construction equipment (asset class 15.0) was purchased by the Jones Construction Company in 2015. The cost basis was $310,000. The plan is to use the equipment and dispose it after about 8 years of service. a). Determine the MACRS-GDS and MACRS-ADS recovery periods for the equipment. b). Determine the annual GDS and ADS depreciation deductions for this property. c). If the company disposes the equipment and sells it sooner in 2017, instead of 2023, what would the the GDS and ADS depreciations for that year? d). Based on (c), what are the corresponding book values under the GDS and ADS depreciations? MACRS Class Lives and Recovery Periods Recovery Periods GDS ADS Class Life 10 6 7 5 5 5 3 10 5 5 9 5 9 4 5 6 6 4 4 10 10 14 16 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 ww4669094926208890 10 9.5 14 5 3 7 7 7 10 5 5 7 5 7 15 7 5 7 7 10 20 20 7 10 10 14 16 6 9 10 9.5 14 20 12 6 12 10 18 28 35 10 12 12 10 18 35 10 Year 1 2 3 4 5 6 7 GDS Recovery Rates (rk) for the Six Personal Property Classes Recovery Period (and Property Class) 3-year 5-year 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 8 9 10 11 12 13 14 15 16 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 17 18 19 20 21 aThese rates are determined by applying the 200% DB method (with switchover to the SL method) to the recovery period with the half-year convention applied to the first and last years. Rates for each period must sum to 1.0000. "These rates are determined with the 150% DB method instead of the 200% DB method (with switchover to the SL method) and are rounded off to four decimal places. years. a). The GDS recovery period is The ADS recovery period is years. b). Determine the GDS depreciation deductions for this property. (Round to the nearest dollar.) Year The GDS depreciation deductions, $ 2015 2016 2017 $ $ $ $ $ $ 2018 2019 2020 Determine the ADS depreciation deductions for this property. (Round to the nearest dollar.) Year The ADS depreciation deductions, $ 2015 $ 2016 $ 2017 $ 2018 $ 2019 $ 2020 $ 2021 $ c). The GDS depreciation deduction for the year 2017 would be $ (Round to the nearest dollar.) The ADS depreciation deduction for the year 2017 would be $ . (Round to the nearest dollar.) d). The book value at end of 2017 based on GDS depreciations is $ The book value at end of 2017 based on ADS depreciations is $ (Round to the nearest dollar.)
