The percentages in MACRS GDS for personal property were calculated based on the

Question

The percentages in MACRS GDS for personal property were calculated based on the following principles:

- The 3-, 5-, 7-, and 10 -year classes use 200% and the 15- and 20-year classes use 150% declining balance depreciation.
- All classes convert to straight-line depreciation in the optimal year, shown with the asterisk (*).
- A half-year of depreciation is allowed in the first and last recovery years.
- Salvage value are assumed to be zero for all assets.

If the 20-year class uses 200% declining balance depreciation, what would be the depreciation schedule for the 20-year class?

Explanation / Answer

Hi, If you like my answer rate me first...that way only I can earn points. Thanks Let us assume the assets value = 100 Year 1 100/20*2 = 10, Remaining Bal = 90 Year 2 90* 0.1 = 9 , Remaining Bal = 81 Year 3 81* 0.1 = 8.1 , Remaining Bal = 72.9 Year 4 72.9* 0.1 = 7.29 , Remaining Bal = 65.61 Year 5 65.61* 0.1 = 6.56. , Remaining Bal = 59.05 Like this Year 20 0.9^20 * 100 = 12.16 , Remaining Bal = 0

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