Question

Complete the following depreciation table using the straight-line method (assume the asset is purchased on January 1st): Auto: $20,000 Residual value: $5,000 Estimated life: 5 years Depreciation Accumulated Year Cost Expense Depreciation Book Value 1 __________ ______________ _______________ ___________ 2 __________ ______________ _______________ ___________ 3 __________ ______________ _______________ ___________ 4 __________ ______________ _______________ ___________ 5 __________ ______________ _______________ ___________ 6 __________ ______________ _______________ ___________

Answer 1

Straight Line Depreciation Schedule

Straight Line Depreciation = [Cost of the Equipment – Residual Value] / Useful Life

= [$20,000 - $5,000] / 5 Years

= $15,000 / 5 Years

= $3,000 per year

Year	Book Value at the year beginning	Depreciation Expenses	Accumulated Depreciation	Book Value at the year end
1	20,000	3,000	3,000	17,000
2	17,000	3,000	6,000	14,000
3	14,000	3,000	9,000	11,000
4	11,000	3,000	12,000	8,000
5	8,000	3,000	15,000	5,000