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The owner of a hair salon buys new equipment.
Cost: $1100
Salvage value: $400
Useful life: 7 years
Make a straight-line depreciation schedule for the equipment. (See Example 1 and Example 2.)
A spreadsheet is available to help you complete this exercise.
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The owner of a hair salon buys new equipment.
Cost: $14,500
Salvage value: $2500
Useful life: 10 years
Make a straight-line depreciation schedule for the equipment. (See Example 1 and Example 2.)
A spreadsheet is available to help you complete this exercise.
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The owner of a barbershop buys new equipment. A graph of the straight-line depreciation schedule for the equipment is shown. What is the value of the equipment after 5 years? (See Example 1 and Example 2.)
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From the graph, the value after 5 years appears to be about $5000.
You can check this by making a depreciation schedule.
Cost: $10,000
Salvage value: $2000
Useful life: 8 years
The annual depreciation is
A spreadsheet showing the depreciation schedule is shown below.
From the schedule, you can see that the value after 5 years is exactly $5000.
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The owner of a barbershop buys new equipment. A graph of the straight-line depreciation schedule for the equipment is shown. What is the value of the equipment after 7 years?
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When a business sells equipment at a price greater than its value, the U.S. Internal Revenue Service collects taxes on the difference. This is called depreciation recapture. Find the taxable amount for each year in which depreciation recapture could occur for a selling price of $6000. (See Example 1 and Example 2.)
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Begin by making a depreciation schedule.
Cost: $10,000
Salvage value: $2000
Useful life: 8 years
The annual depreciation is
After making a depreciation schedule, add a 5th column that shows the excess on which taxes must be paid.
A spreadsheet showing the depreciation schedule is shown below.
So, if the equipment is sold in (or after) Year 5, the business must pay tax on part of the sale price.
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When posting a comment, you agree to our Terms of Use.Showing 1 commentsGuest 4 years ago |Hi, I would like to ask what's the point of collecting taxes on the difference?0 0 -
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When a business sells equipment at a price less than its value, the difference is tax deductible. Find the tax deductible amount for each year in which a selling price of $4000 would cause a loss.
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