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Les 21 2
- 1. STRAIGHT-LINE DEPRECIATION
+ −
Original Estimated Estimated Total
÷ ×
Cost – Salvage Value = Depreciation Expense
$1,250.00 – $250.00 = $1,000.00
Estimated Years of Annual
Total Depreciation Estimated Depreciation
Expense ÷ Useful Life = Expense
$1,000.00 ÷ 5 = $200.00
Lesson 21-2, page 552
© South-Western
Educational Publishing
- 2. CALCULATING DEPRECIATION EXPENSE FOR PART
OF A YEAR
+ −
Annual Months Monthly
÷ ×
Depreciation in a Depreciation
Expense ÷ Year = Expense
$900.00 ÷ 12 = $75.00
Monthly Number of Partial Year’s
Depreciation Months Asset Depreciation
Expense × Is Used = Expense
$75.00 × 5 = $375.00
Lesson 21-2, page 552
© South-Western
Educational Publishing
- 3. CALCULATING ACCUMULATED DEPRECIATION
+ − 20X2 20X3 20X3
÷ × Accumulated Depreciation Accumulated
Depreciation + Expense = Depreciation
$400.00 + $200.00 = $600.00
CALCULATING BOOK VALUE
Original Accumulated Ending
Cost – Depreciation = Book Value
$1,250.00 – $600.00 = $650.00
Beginning Annual Ending
Book Value – Depreciation = Book Value
$850.00 – $200.00 = $650.00
Lesson 21-2, page 553
© South-Western
Educational Publishing
- 4. TERMS REVIEW
depreciation expense
estimated salvage value
straight-line method of depreciation
accumulated depreciation
book value of a plant asset
Lesson 21-2, page 554
© South-Western
Educational Publishing