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.) Use Table 7-2.
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 these choices are correct

Question

Quizplus · Accepted Answer

The correct answer is A.The first-year MACRS depreciation is $156,800 (10% of $1,568,000). The second-year MACRS depreciation is $282,240 (18% of $1,568,000).

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