Exercise 8-14A Computing depreciation for tax purposes LO 8-6

Crossroads Eye Care Company purchased $125,700 of equipment on March 1, Year 1.

Year	5-Year Property, %				7-Year Property, %
1		20.00				14.29
2		32.00				24.49
3		19.20				17.49
4		11.52				12.49
5		11.52				8.93
6		5.76				8.92
7						8.93
8						4.46

Required a. Compute the amount of depreciation expense that is deductible under MACRS for Year 1 and Year 2, assuming that the equipment is classified as a seven-year property. (Round your answers to the nearest whole dollar amount.)

b. Compute the amount of depreciation expense that is deductible under MACRS for Year 1 and Year 2, assuming that the equipment is classified as a five-year property. (Round your answers to the nearest whole dollar amount.)