Better Chocolates has a new project that requires $838,000 of equipment.What is the depreciation in Year 6 of this project if the equipment is classified as seven-year property for MACRS purposes? The MACRS allowance percentages are as follows,commencing with year 1:14.29,24.49,17.49,12.49,8.93,8.92,8.93,and 4.46 percent.

Question

Quizplus · Accepted Answer

To calculate the depreciation in Year 6, we need to find the MACRS allowance percentage for Year 6. Since the equipment is classified as seven-year property, Year 6 corresponds to the sixth year.

The MACRS allowance percentages for the sixth year is 8.92 percent.

Depreciation in Year 6 = MACRS allowance percentage for Year 6 x Cost of equipment

Depreciation in Year 6 = 0.0892 x $838,000

Depreciation in Year 6 = $74,749.60

Therefore, the correct answer is D) $74,749.60.

Better Chocolates Has a New Project That Requires $838,000 of Equipment.What