A tractor costing $80,000 is depreciated using MACRS.The tractor qualifies as a 3-year property,and has a scrap value of $20,000.The depreciation rates are: $\begin{array} { | l | l | }
\hline \text { Year 1: } & 33.33 \% \
\hline \text { Year 2: } & 44.45 \% \
\hline \text { Year 3: } & 14.81 \% \
\hline \text { Year 4: } & 7.41 \% \
\hline
\end{array}$ What is the depreciation expense for year 2?

Question

A tractor costing $80,000 is depreciated using MACRS.The tractor qualifies as a 3-year property,and has a scrap value of $20,000.The depreciation rates are: $\begin{array} { | l | l | } 
\hline \text { Year 1: } & 33.33 \% \
\hline \text { Year 2: } & 44.45 \% \
\hline \text { Year 3: } & 14.81 \% \
\hline \text { Year 4: } & 7.41 \% \
\hline
\end{array}$ What is the depreciation expense for year 2?

Quizplus · Accepted Answer

The MACRS method uses a fixed percentage to calculate depreciation each year. For 3-year property, the percentages are 33.33%, 44.45%, 14.81%, and 7.41%. Therefore, the depreciation expense for year 2 would be: 
$80,000 x 44.45% = $35,560.

A Tractor Costing $80,000 Is Depreciated Using MACRS What Is the Depreciation Expense for Year 2? A)$44,450 B)$35,560

A Tractor Costing $80,000 Is Depreciated Using MACRS What Is the Depreciation Expense for Year 2?
A)$44,450
B)$35,560