A wood products company has decided to purchase new logging equipment for $ with a trade-in of its old equipment. The old equipment has a BV of $ at the time of the trade-in. The new equipment will be kept for years before being sold. Its estimated SV at the time is expected to be $_____________. Using the MACRS (GDS recovery period), what is the depreciation charge permissible at year ?

A wood products company has decided to purchase new logging equipment for $100,000 with a trade-in of its old equipment. The old equipment has a BV of $10,000 at the time of the trade-in. The new equipment will be kept for 10 years before being sold. Using the MACRS (GDS recovery period), what is the depreciation charge permissible at year 1?

Depreciable value using MACRS is $100,000 and logging equipment is classified as 7 year class, and I will use the half-year convention:

depreciation year 1 = $100,000 x 14.29% = $14,290