A construction company is purchasing a new Tractor for over the road use. The IRS classifies...
A construction company is purchasing a new Tractor for over the road use. The IRS classifies this as 3-year property. The truck costs $471000.
Determine the depreciation allowance for each year using DDB
method.
Year 1 $
Year 2 $
Year 3 $
Year 4 $
Homework Answers
P = 471000, life = 3 yrs
d = 2/n = 2/3
depreciation in year 1 = 2/3 * 471000 = 314000
Book value at the end of yr 1 = 471000 - 314000 = 157000
Depreciation in yr 2 = 2/3 * 157000 = 104666.67
Book value at the end of yr 2 = 157000 - 104666.67 = 52333.33
Depreciation in yr 3 = 2/3 * 52333.33 = 34888.89
Book value at the end of yr 3 = 52333.33 - 34888.89 = 17444.44
Depreciation in yr 4 = 2/3 * 17444.44 = 11629.63
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