Please answer the following questions Using the new table pr

Scoro: 0.18 of 1 pt Hw score 59.74%. 4.18 of 7 pts & P10-8 (similar to) Depreclation expense. Richardses Tree Farm, Inc. has just purchased a now aeial tree trimmer for $90,000. Caloulsate the depreciation schedule using a seven year lKe (for the property class category of a single-purpose agrioutural arnd horliouiltural structure from Tabie 10.3) for both straig Ine deprediation and MACRS, I Use the half-year convention for both methods. Compane the deprediation schedules befone and ater kaxes usng ? Question Hep * a40% tax rate. what do you note about the dferonoe between these two metodu? Using a seven-year life, straight-ine deprociation, and the half-year convention for the fret and last years, what is the areual deprediation of the trimmer $12857 (Round to the nearest doila) Using a seven-year lie, straight line depreciation, and tee half year convention for the fest and last years, what is the depreciation for the frst and last years? 0429 (Round to the nearest dolar.) Using a sever-year and MACRS deprecaton, . what ? tn mual depreciation ofthe timmer for year 1? 12,861 (Round to the nearest dolla) What is the annual depreclasion of the trimmer for year 2 s 22,041 (Round to the nearest dolar) What is the annusl deprociatiom of tho timmer for year 37 s 16,741 (Round to the nesrost dollan What is the arnual depeeciation of the trimmer for year 47 s 11241 (Round to the nearest dollor) What is the annual deprecieition of the timmnon for yeur 52 8.037ound to the noarest dolar What io the aual doprciation of the wmer for year ) 6.037 Rund to the newest olan) What is the annual depcioof the timmer or year 7? ,037 (Round to the noaret ooa What is the annual deproclation of the rimer for yew 8 s4 006 (Round to the reareat dolar) Question is complete, Tap on the red Indicators to see incorrect answers senual sugeuciotken of the triemer for yew 87 mr Question

Solution

PART -1

The cost of the capital asset = 90,000

The 7 year MACRS depreciation rates is as follows:

Using straight line depreciation, the annual depreication over the life = 90,000/7 = 12,857.14 = $12,857 (Rounded)

Using straight line depreciation, first and last year depreciation = 12,857.14/2 = = $6,428.57 = $6,429

MACRS year 1 depreciation = 0.1429*90,000 = 12,861

MACRS year 2 depreciation = 0.2449*90,000 = 22,041

MACRS year 3 depreciation = 0.1749*90,000 = 15,741

MACRS year 4 depreciation = 0.1249*90,000 = 11,241

MACRS year 5 depreciation = 0.0893*90,000 = 8,037

MACRS year 6 depreciation = 0.0892*90,000 = 8,028

MACRS year 7 depreciation = 0.0893*90,000 = 8,037

MACRS year 8 depreciation = 0.0446*90,000 = 4,014

PART 2 : Cost of the asset = 89,000

Using straight line depreciation, the annual depreication over the life = 89,000/7 = 12,714.28 = $12,714 (Rounded)

Using straight line depreciation, first and last year depreciation = 12,714.28/2 = = $6,428.57 = $6,357.14 = 6,357 (Rounded)

MACRS year 1 depreciation = 0.1429*89,000 = 12,718

Year	Depreciation rates
1	14.29%
2	24.49%
3	17.49%
4	12.49%
5	8.93%
6	8.92%
7	8.93%
8	4.46%