Case Study 11 -If the Equipment in Problem 11

Case Study 11.7
Given:
Initial Cost, P = $50,000 Salvage Value at the end of 5 years, S = $10,000.
Depreciable Life, N= 5 Years
$$\begin{array} { | l | l | l | } \hline \text { Year } & \begin{array} { l } \text { Projected } \\\text { Production, units }\end{array} & \begin{array} { l } \text { Actual } \\\text { Production, units }\end{array} \\\hline 1 & 4,500 & 5,000 \\\hline 2 & 5,000 & 4,000 \\\hline 3 & 3,500 & 3,000 \\\hline 4 & 5,500 & 5,000 \\\hline 5 & 6,500 & \text { Not krown } \\\hline \text { Total } & \mathbf { 2 5 , 0 0 0 } & \\\hline\end{array}$$
-If the equipment in problem 11.7 is sold at the end of year 4 for $30,000, what is the depreciation recapture on this equipment?

A) $4,000
B) $5,600
C) $7,200
D) $8,400

Correct Answer:

Verified

Show Answer