More Related Content
Similar to Lesson 18 2 (15)
More from nadinesullivan (20)
Lesson 18 2
- 2. 2
STRAIGHT-LINE DEPRECIATION
page 538
Calculating Annual Depreciation Expense
1. Subtract the asset’s estimated salvage value from the original cost.
2. Divide the estimated total depreciation expense by the years of
estimated useful life.
Original
Cost
–
Estimated
Salvage Value
=
$3,250.00
–
$250.00
=
Estimated Total
Depreciation
Expense
$3,000.00
÷ Years of Estimated =
Useful Life
÷
5
CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning
=
Estimated Total
Depreciation
Expense
$3,000.00 1
Annual
Depreciation
Expense
$600.00
2
LESSON 18-2
- 3. 3
CALCULATING DEPRECIATION
EXPENSE FOR PART OF A YEAR
page 539
Calculating Partial Year’s Depreciation Expense
1. Divide the annual depreciation expense by 12.
2. Multiply the monthly depreciation expense by the number of
months the plant asset is used in a year.
Annual
Depreciation
Expense
÷
Months in
a Year
=
Monthly
Depreciation
Expense
$600.00
÷
12
=
$50.00
Monthly
Depreciation
Expense
$50.00
× Number of Months =
Asset Is Used
×
5
CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning
=
1
Partial Year’s
Depreciation
Expense
$250.00
2
LESSON 18-2
- 5. 5
CALCULATING BOOK VALUE
page 540
Original
Cost
–
Accumulated
Depreciation
=
Ending
Book Value
$3,250.00
–
$1,800.00
=
$1,450.00
Beginning
Book Value
–
Annual
Depreciation
=
Ending
Book Value
$2,050.00
–
$600.00
=
$1,450.00
CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning
LESSON 18-2
- 6. 5
CALCULATING BOOK VALUE
page 540
Original
Cost
–
Accumulated
Depreciation
=
Ending
Book Value
$3,250.00
–
$1,800.00
=
$1,450.00
Beginning
Book Value
–
Annual
Depreciation
=
Ending
Book Value
$2,050.00
–
$600.00
=
$1,450.00
CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning
LESSON 18-2