Dorian,a calendar year corporation,purchased $1,568,000 of equipment on May 3.This was Dorian's only purchase of depreciable property for the year.If the equipment has a 10-year recovery period,refer to Table 7.2 and compute Dorian's first and second-year MACRS depreciation.(Disregard the Section 179 deduction and bonus depreciation in making your calculation.)
A)First year $156,800; second year $282,240
B)First year $78,400; second year $282,240
C)First year $156,800; second year $245,016
D)None of the above

Question

Quizplus · Accepted Answer

The correct answer is A.The MACRS depreciation rates for a 10-year recovery period are:Year 1: 10%Year 2: 18%Year 3: 14.4%Year 4: 11.52%Year 5: 9.22%Year 6: 7.37%Year 7: 6.55%Year 8: 6.55%Year 9: 6.56%Year 10: 6.55%Dorian's first-year MACRS depreciation is $156,800 (10% x $1,568,000). Dorian's second-year MACRS depreciation is $282,240 (18% x $1,568,000).

Dorian,a Calendar Year Corporation,purchased $1,568,000 of Equipment on May 3