Depreciation expense. Richardses' Tree Farm, Inc. has just purchased a new aerial tree trimmer for $85,000. 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, E. Use the half-year convention for both methods. Compare the depreciation schedules before and after taxes using a 40% tax rate. What do you ne about the difference between these two methods? 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? (Round to the nearest dollar.) Using a seven-year life, straight-line depreciation, and the half-year convention for the first and last years, what is the depreciation for the first and last years? (Round to the nearest dollar.) Data Table Using a seven-year life and MACRS depreciation, E, what is the ann (Round to the nearest dollar.) MACRS Fixed Annual Expense Percentages by Recovery Class Click on this icon o to download the data from this table What is the annual depreciation of the trimmer for year 2? (Round to the nearest dollar.) Year 3-Year 5-Year 7-Year 10-Year 1 33.33% 20.00% 14.29% 10.00% What is the annual depreciation of the trimmer for year 3? 44.45% 32.00% 24.49% 18.00% (Round to the nearest dollar.) 3 14.81% 19.20% 17.49% 14.40% 4 7.41% 11.52% 12.49% 11.52% What is the annual depreciation of the trimmer for year 4? 11.52% 8.93% 9.22% 5.76% 8.93% 7.37% (Round to the nearest dollar.) 7 8.93% 6.55% 4.45% 6.55% Sligk t e coloot vou r oncuuor/c)
Depreciation expense. Richardses' Tree Farm, Inc. has just purchased a new aerial tree trimmer for $85,000. 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, E. Use the half-year convention for both methods. Compare the depreciation schedules before and after taxes using a 40% tax rate. What do you ne about the difference between these two methods? 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? (Round to the nearest dollar.) Using a seven-year life, straight-line depreciation, and the half-year convention for the first and last years, what is the depreciation for the first and last years? (Round to the nearest dollar.) Data Table Using a seven-year life and MACRS depreciation, E, what is the ann (Round to the nearest dollar.) MACRS Fixed Annual Expense Percentages by Recovery Class Click on this icon o to download the data from this table What is the annual depreciation of the trimmer for year 2? (Round to the nearest dollar.) Year 3-Year 5-Year 7-Year 10-Year 1 33.33% 20.00% 14.29% 10.00% What is the annual depreciation of the trimmer for year 3? 44.45% 32.00% 24.49% 18.00% (Round to the nearest dollar.) 3 14.81% 19.20% 17.49% 14.40% 4 7.41% 11.52% 12.49% 11.52% What is the annual depreciation of the trimmer for year 4? 11.52% 8.93% 9.22% 5.76% 8.93% 7.37% (Round to the nearest dollar.) 7 8.93% 6.55% 4.45% 6.55% Sligk t e coloot vou r oncuuor/c)
Century 21 Accounting Multicolumn Journal
11th Edition
ISBN:9781337679503
Author:Gilbertson
Publisher:Gilbertson
Chapter19: Accounting For Plant Assets, Depreciation, And Intangible Assets
Section19.5: Declining-balance Method Of Depreciation
Problem 1WT
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Depreciation Methods
The word "depreciation" is defined as an accounting method wherein the cost of tangible assets is spread over its useful life and it usually denotes how much of the assets value has been used up. The depreciation is usually considered as an operating expense. The main reason behind depreciation includes wear and tear of the assets, obsolescence etc.
Depreciation Accounting
In terms of accounting, with the passage of time the value of a fixed asset (like machinery, plants, furniture etc.) goes down over a specific period of time is known as depreciation. Now, the question comes in your mind, why the value of the fixed asset reduces over time.
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Question
Transcribed Image Text:Depreciation expense. Richardses' Tree Farm, Inc. has just purchased a new aerial tree trimmer for $85,000. Calculate the depreciation schedule using a
seven-year life (for the property class category of a single-purpose agricultural and horticultural structure from Table 10.3) for both straight-line depreciation and
MACRS, E. Use the half-year convention for both methods. Compare the depreciation schedules before and after taxes using a 40% tax rate. What do you no
about the difference between these two methods?
Using a seven-year life, straight-line depreciation, and the half-year convention for the first and last years, what is the annual depreciation of the trimmer?
(Round to the nearest dollar.)
Using a seven-year life, straight-line depreciation, and the half-year convention for the first and last years, what is the depreciation for the first and last years?
(Round to the nearest dollar.)
i Data Table
Using a seven-year life and MACRS depreciation, , what is the ann
(Round to the nearest dollar.)
MACRS Fixed Annual Expense Percentages by Recovery Class
Click on this icon to download the data from this table
What is the annual depreciation of the trimmer for year 2?
(Round to the nearest dollar.)
Year
3-Year
5-Year
7-Year
10-Year
1
33.33%
20.00%
14.29%
10.00%
What is the annual depreciation of the trimmer for year 3?
44.45%
32.00%
24.49%
18.00%
2$
(Round to the nearest dollar.)
3
14.81%
19.20%
17.49%
14.40%
4
7.41%
11.52%
12.49%
11.52%
What is the annual depreciation of the trimmer for year 4?
5
11.52%
8.93%
9.22%
5.76%
8.93%
7.37%
(Round to the nearest dollar.)
7
8.93%
6.55%
8
4.45%
6.55%
Click to select your answer(s).
6.55%
10
6.55%
11
3.28%
Transcribed Image Text:What is the annual depreciation of the trimmer for year 5?
(Round to the nearest dollar.)
What is the annual depreciation of the trimmer for year 6?
(Round to the nearest dollar.)
What is the annual depreciation of the trimmer for year 7?
(Round to the nearest dollar.)
What is the annual depreciation of the trimmer for year 8?
(Round to the nearest dollar.)
Compare the depreciation schedules before and after taxes using a 40% tax rate. What do you notice about the difference between these two methods? (Select the
best response.)
O A. The difference is that the Straight-line moves up the tax shield to the early years of depreciation yet the total tax shield is the same under both depreciation
schedules.
O B. The difference is that the MACRS moves up the tax shield to the early years of depreciation yet the total tax shield is the same under both depreciation
schedules.
Click to select vour answer(s).
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