Summer 2018 Practice 22. Davis Company purchased a new piece of equipment on July 1, 2014 at a cost of $1,800,000. The equipment has an estimated useful life of 5 years and an estimated salvage value of $150,000. The current year end is 12/31/15. Davis records depreciation to the nearest month. Davis uses MACRS depreciation for tax purposes. This property qualifies for the seven year asset class. MACRS Depreciation Rates by Class of Proper 10-year 7-year (200% DB) 14.29 24.49 17.49 12.49 8.93 8.92 8.93 4.46 Recovery3-year 5-year (20096 DB) 20.00 32.00 19.20 11.52 11.52 (200% DB) 10.00 18.00 14.40 11.52 9.22 7.37 6.55 6.55 6.56 R 55 (20096 DB) 33.33 44.45 14.81 7.41 Year 2 5 6 7 .. 5.76 9 What is accumulated depreciation as of December 31, 2015 under the straight-line method? What is accumulated depreciation as of December 31, 2015 under the MACRS method? Assuming a tax rate of 25%, what is the deferred tax liability associated with this equipment