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Sam purchased a factory with an initial tax basis of $13,000,000. What is his monthly depreciation allowance?

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Answer:

the monthly depreciation allowance is $27,778

Step-by-step explanation:

The computation of the monthly depreciation allowance is as follows;

= Purchase value of the factory ÷ (number of months in a year × classified life of non-residental property)

= $13,000,000 ÷ (12 × 39)

= $13,000,000 ÷ 468

= $27,778

Hence, the monthly depreciation allowance is $27,778

we simply applied the above formula

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