please explain this concept step by step, thanks.

E F G C D 552,000 5 MAY 1ST, 01 ZERO JAN 1ST, YEAR 4 241,500 M-1 ANALYSIS: SL MACRS 241,500 294,400 16,100 YEAR 01 YEAR 02 YEAR 03 YEAR 04 73,600 110,400 110,400 (16,100) 110,400 176,640 105,984 82,524 A B MACHINE DEPRECIABLE BASIS LIFE (YEARS) DATE PLACED IN SERVICE SALVAGE VALUE 1 DATE SOLD 2 SALES PRICE 13 14 15 PREPARE THE FINANCIAL STMT JOURNAL ENTRY UPON SALE ASSUMING STRAIGHT LINE DEPR 16 17 18 CASH 19 AD 20 LOSS 21 MACHINE 22 23 24 25 26 PREPARE THE TAX BASIS JOURNAL ENTRY UPON SALE ASSUMING MACRS DEPR 27 28 CASH 29 AD 30 MACHINE 31 GAIN 32 33 34 35 36 (A) MACRS DEPR RATES (SEE APPENDIX 11A) 37 YEAR 01 = 20% (MID-YEAR) 38 YEAR 02 = 32% 39 YEAR 03 = 19.2% 40 YEAR 04 = 11.52% 41 YEAR 05 = 11.52% Sheet1 Sheet2 Sheet3 552,000 552,000 552,000 NET 241,500 393,024 552.000 82.524 634 524 634 524