Will Do, Inc.just purchased some equipment at a cost of $650,000.What is the proper methodology for computing the depreciation expense for year 3 if the equipment is classified as 5-year property for MACRS? $$\begin{array}{l}
\text { MACRS 5-year property }\
\begin{array} { l r }
\underline{\text { Year }} &\underline{ \text { Rate } }\
1 & 20.00 \% \
2 & 32.00 \% \
3 & 19.20 \% \
4 & 11.52 \% \
5 & 11.52 \% \
6 & 5.76 \%
\end{array}
\end{array}$$

Question

Will Do, Inc.just purchased some equipment at a cost of $650,000.What is the proper methodology for computing the depreciation expense for year 3 if the equipment is classified as 5-year property for MACRS? $$\begin{array}{l}
\text { MACRS 5-year property }\
\begin{array} { l r } 
\underline{\text { Year }} &\underline{ \text { Rate } }\
 1 & 20.00 \% \
2 & 32.00 \% \
3 & 19.20 \% \
4 & 11.52 \% \
5 & 11.52 \% \
6 & 5.76 \%
\end{array}
\end{array}$$

Quizplus · Accepted Answer

The depreciation expense for year 3 under MACRS is calculated by multiplying the cost of the equipment by the year 3 rate: $650,000 * 19.20%.

Will Do, Inc A)$650,000 * (1 -