Question
Depreciation expense. Richardses' Tree Farm, Inc. has just purchased a new aerial tree trimmer for $94000.Calculate the depreciation schedule using a seven-year life (for the
Depreciation expense. Richardses' Tree Farm, Inc. has just purchased a new aerial tree trimmer for $94000.Calculate the depreciation schedule using a seven-year life (for the property class category of a single-purpose agricultural and horticultural structure from Table 10.3) for both straight-line depreciation and MACRS. Use thehalf-year convention for both methods. Compare the depreciation schedules before and after taxes using a 40% tax rate. What do you notice about the difference between these two methods?
1: Using a seven-year life, straight-line depreciation, and the half-year convention for the first and last years, what is the annual depreciation of the trimmer?
2:Using a seven-year life, straight-line depreciation, and the half-year convention for the first and last years, what is the first and last year depreciation?
3:Using a seven-year life and MACRS depriciation, what is the annual depreciation of the trimmer for year 1?
4: WHat is the annual depriciation for year 2, 3, 4, 5, 6, 7, 8?
MACRS Fixed Annual Expense Percentages by Recovery Class
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