Final answer:
To prepare a depreciation table with book value, we can use the Modified Accelerated Cost Recovery System (MACRS) to calculate the annual depreciation expense. The MACRS assigns depreciation rates based on the asset's class and recovery period. Subtract the accumulated depreciation from the original cost of the equipment to calculate the book value.
Step-by-step explanation:
To prepare a depreciation table with book value, we can use the Modified Accelerated Cost Recovery System (MACRS) to calculate the annual depreciation expense. The MACRS assigns depreciation rates based on the asset's class and recovery period. In this case, since the equipment has a seven-year life, we will use the MACRS table for seven-year property.
The MACRS table provides the depreciation rates for each year, which we can use to calculate the depreciation expense. To calculate the book value, subtract the accumulated depreciation from the original cost of the equipment. Here is an example depreciation table:
Year Depreciation Expense Accumulated Depreciation Book Value
1 $11,680 $11,680 $70,320
2 $18,656 $30,336 $51,664
3 $14,112 $44,448 $37,552
4 $8,448 $52,896 $29,104
5 $8,448 $61,344 $20,656
6 $8,448 $69,792 $12,208
7 $8,448 $78,240 $3,760