Questions: Find the depreciation each year for a tractor that was purchased for 25,000 and placed in service midyear under the MACRS method of depreciation as a 3-year property. The year 1 depreciation is . Q Round to the nearest cent as needed.

Find the depreciation each year for a tractor that was purchased for 25,000 and placed in service midyear under the MACRS method of depreciation as a 3-year property.

The year 1 depreciation is . Q Round to the nearest cent as needed.

Transcript text: Find the depreciation each year for a tractor that was purchased for $\$ 25,000$ and placed in service midyear under the MACRS method of depreciation as a 3-year property. The year 1 depreciation is $\$$. $\mathbb{Q}$ Round to the nearest cent as needed.

Solution

Solution Steps

Step 1: Calculate Year 1 Depreciation

The depreciation for Year 1 is calculated using the MACRS rate of \(33.33\%\): \[ \text{Depreciation Year 1} = 25000 \times 0.3333 = 8332.50 \]

Step 2: Calculate Year 2 Depreciation

The depreciation for Year 2 is calculated using the MACRS rate of \(44.45\%\): \[ \text{Depreciation Year 2} = 25000 \times 0.4445 = 11112.50 \]

Step 3: Calculate Year 3 Depreciation

The depreciation for Year 3 is calculated using the MACRS rate of \(14.81\%\): \[ \text{Depreciation Year 3} = 25000 \times 0.1481 = 3702.50 \]

Step 4: Calculate Year 4 Depreciation

The depreciation for Year 4 is calculated using the MACRS rate of \(7.41\%\): \[ \text{Depreciation Year 4} = 25000 \times 0.0741 = 1852.50 \]

Final Answer

The depreciation amounts for each year are as follows:

Year 1: \( \boxed{8332.50} \)
Year 2: \( \boxed{11112.50} \)
Year 3: \( \boxed{3702.50} \)
Year 4: \( \boxed{1852.50} \)

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