The bookkeeper for the Martel Company is computing depreciation for income tax purposes, using the figures from the MACRS tables supplied by the IRS. The equipment being depreciated had a cost of $16,000 and falls under the class of equipment to be depreciated at a rate of 20% for the first year and 32% for the second year. The equipment was purchased and put into use during the first quarter. Compute the total amount of depreciation expense through the end of the second year.

MACRS Tables

Depreciation schedules provided by the Modified Accelerated Cost Recovery System used in the United States for determining the depreciation of assets for tax purposes.

Depreciation Expense

The portion of the cost of a fixed asset that is considered to be consumed or used up in each accounting period, reflecting the decrease in the asset's value over time.

Equipment

Refers to tangible assets used in the operation or production process of a business, such as machinery, tools, and vehicles.