**Depreciation Expense Analysis:**Richards' Tree Farm, Inc. has invested in a new aerial tree trimmer costing $85,000. The task is to calculate the depreciation using two different methods: Straight-Line Depreciation and MACRS (Modified Accelerated Cost Recovery System), both employing a seven-year life with the half-year convention. The comparison covers both schedules before and after taxes utilizing a 40% tax rate. **Questions:**1. **Straight-Line Depreciation (7-Year Life) with Half-Year Convention:** - What is the annual depreciation of the trimmer? - [Input Box] (Round to the nearest dollar.) - What is the depreciation for the first and last years? - [Input Box] (Round to the nearest dollar.)2. **MACRS Depreciation (7-Year Life):** - What is the annual depreciation of the trimmer? - [Input Box] (Round to the nearest dollar.) - **Year-wise Depreciation Amount:** - Year 2: - [Input Box] (Round to the nearest dollar.) - Year 3: - [Input Box] (Round to the nearest dollar.) - Year 4: - [Input Box] (Round to the nearest dollar.)**MACRS Depreciation Table:**The table details the percentage of asset cost to be depreciated each year across different asset lifespans (3, 5, 7, and 10-year classes).- **7-Year Class Percentages:** - Year 1: 14.29% - Year 2: 24.49% - Year 3: 17.49% - Year 4: 12.49% - Year 5: 8.93% - Year 6: 8.92% - Year 7: 8.93% - Year 8: 4.46%**Graph Summary:**The MACRS table illustrates how depreciation percentages peak in the second year, decline over the remaining asset life, and finalize in the eighth year. This accelerated depreciation method front-loads expense recognition in earlier years compared to straight-line methods.**Instructions:**Click to select your answers for calculations rounded to the nearest dollar. ### Depreciation Schedule Analysis#### Annual Depreciation Calculation1. **Year 5 Depreciation** - Calculate the annual depreciation of the trimmer for year 5. - Answer should be rounded to the nearest dollar.2. **Year 6 Depreciation** - Calculate the annual depreciation of the trimmer for year 6. - Answer should be rounded to the nearest dollar.3. **Year 7 Depreciation** - Calculate the annual depreciation of the trimmer for year 7. - Answer should be rounded to the nearest dollar.4. **Year 8 Depreciation** - Calculate the annual depreciation of the trimmer for year 8. - Answer should be rounded to the nearest dollar.#### Depreciation Schedule Comparison (Using a 40% Tax Rate)- When comparing depreciation schedules before and after taxes, consider the impact of different methods: - **Option A:** Straight-line depreciation moves the tax shield to the early years of depreciation. However, the total tax shield remains the same under both Straight-line and MACRS schedules. - **Option B:** MACRS (Modified Accelerated Cost Recovery System) moves the tax shield to the early years of depreciation. Despite this shift, the total tax shield remains the same under both depreciation schedules.Select the best response based on your analysis.### Instructions- Click on the appropriate option to select your answer(s).

Name: **Depreciation Expense Analysis:**Richards' Tree Farm, Inc. has inves
Uploaded: 2024-03-05T11:50:36.000Z
Channel: Bartleby
Description: **Depreciation Expense Analysis:**Richards' Tree Farm, Inc. has invested in a new aerial tree trimmer costing $85,000. The task is to calculate the depreciation using two different methods: Straight-Line Depreciation and MACRS (Modified Accelerated