Question

Tom has bought a yellow automobile for $10K. Using MACRS GDS and DDB depreciation, construct the annual depreciation allowance table. please explain all steps and show all steps and work thank you

Answer 1

Answer: MACRS GDS and DDB depreciation

Tom has bought a yellow automobile for $10K.

annual depreciation allowance table as per MACRS GDS and DDB depreciation

Step 1 : Class of Property

It depends on useful life and recovery period of such property.

Here the details are not given, Hence we assume that such property is for 5 year period

Step 2 : Required Depreciation Conversion and method applied :

The period and category of property to calculate depreciation is not given hence, Hence 200% GDS AND DDB to be considered from table to calculate depreciation.

Step 3 : Calculation of Depreciation as per MACRS GDS and DDB depreciation

Year	Property value	MACRS GDS and DDB depreciation rate	Calculation	Depreciation
1	$ 10,000	20%	=$ 10,000 x 20%	=$ 2,000
2	$ 10,000	32%	=$ 10,000 x 32%	=$ 3,200
3	$ 10,000	19.20%	=$ 10,000 x 19.20%	= $ 1,920
4	$ 10,000	11.52%	=$ 10,000 x 11.52%	= $ 1,152
5	$ 10,000	11.52%	=$ 10,000 x 11.52%	= $ 1,152
6	$ 10,000	5.76%	=$ 10,000 x 5.76%	= $ 576