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Topic: Business
Number of pages / Number of words: 2 / 363
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Straight-line Method of Depreciation

Total cost of acquisition = $100,000 100,000 ? 10,000 = 90,000

Salvage value = $10,000 90,000/4 = 22,500

Useful life = 4 years

Balances at Year-end 2005-2008

2005 2006 2007 2008

Cost of equipment 100,000 100,000 100,000 100,000

Accumulated depreciation 22,500 45,000 67,500 90,000

Net book value 77,500 55,000 32,500 10,000

As one can see the ending balance at year 4 equals the salvage value of $10,000...


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Straight-line Method of Depreciation

Total cost of acquisition = $100,000 100,000 ? 10,000 = 90,000

Salvage value = $10,000 90,000/4 = 22,500

Useful life = 4 years

Balances at Year-end 2005-2008

2005 2006 2007 2008

Cost of equipment 100,000 100,000 100,000 100,000

Accumulated depreciation 22,500 45,000 67,500 90,000

Net book value 77,500 55,000 32,500 10,000

As one can see the ending balance at year 4 equals the salvage value of $10,000...


Essay fragment

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