Question

Cost of Asset:		$37,500
Salvage Value:		$2,700
	Length of Service (yrs):	5
Depreciable Base:
Annual Depreciation:
Straight-Line	Years
(SLN)	1	2	3	4	5
Annual Depreciation
Cumulative Depreciation
End-of-Year Book Value

Answer 1

Calculation of depreciation on straight line method

In straight line method, depreciation per year is same for all years.

Depreciation formula= Cost - salvage value / number of years (in straight line method)

Depreciation per year = (37,500 - 2,700)/5 = 6960

Years	Opening balance of asset	annual dep	cumulative annual dep	End the year book value
1	37,500	6960	6960	30,540
2	30,540	6960	13,920	23,580
3	23,580	6960	20,880	16,620
4	16,620	6960	27,840	9660
5	9660	6960	34,800	2700