Depreciation expense. ? Richardses' Tree? Farm, Inc. has justpurchased a new aerial tree trimmer for $95,000. Calculate thedepreciation schedule using a? seven-year life for both?straight-line depreciation and? MACRS, Use the? half-yearconvention for both methods. Compare the depreciation schedulesbefore and after taxes using a 40?% tax rate. What do you noticeabout the difference between these two? methods?

1. Using a? seven-year life,? straight-line depreciation, andthe? half-year convention for the first and last? years, what isthe annual depreciation of the? trimmer?

?(Round to the nearest? dollar.)

2. Using a? seven-year life,? straight-line depreciation, andthe? half-year convention for the first and last? years, what isthe depreciation for the first and last? years?

?(Round to the nearest? dollar.)

3. Using a? seven-year life and MACRS? depreciation,?, what isthe annual depreciation of the trimmer for year? 1??

?(Round to the nearest? dollar.)

4. What is the annual depreciation of the trimmer for year?2??

?(Round to the nearest? dollar.)

5. What is the annual depreciation of the trimmer for year?3?

?(Round to the nearest? dollar.)

6. What is the annual depreciation of the trimmer for year?4???

?(Round to the nearest? dollar.)

7. What is the annual depreciation of the trimmer for year?5?

?(Round to the nearest? dollar.)

8. What is the annual depreciation of the trimmer for year?6?

?(Round to the nearest? dollar.)

9. What is the annual depreciation of the trimmer for year?7?

?(Round to the nearest? dollar.)

10. What is the annual depreciation of the trimmer for year?8?

?(Round to the nearest? dollar.)

11. Compare the depreciation schedules before and after taxesusing a 40?% tax rate. What do you notice about the differencebetween these two? methods? ? (Select the best? response.)

A.

The difference is that the MACRS moves up the tax shield to theearly years of depreciation yet the total tax shield is the sameunder both depreciation schedules.

B.

The difference is that the? Straight-line moves up the taxshield to the early years of depreciation yet the total tax shieldis the same under both depreciation schedules.