STRAIGHTLINE DEPRECIATION Original Cost Estimated Salvage Value Estimated

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STRAIGHT-LINE DEPRECIATION Original Cost Estimated – Salvage Value = Estimated Total Depreciation Expense $1,

STRAIGHT-LINE DEPRECIATION Original Cost Estimated – Salvage Value = Estimated Total Depreciation Expense $1, 250. 00 – = $1, 000. 00 Estimated Total Depreciation Expense $1, 000. 00 $250. 00 ÷ Years of Estimated Useful Life = Annual Depreciation Expense ÷ 5 = $200. 00 Lesson 21 -2, page 550 © South-Western Educational Publishing

CALCULATING DEPRECIATION EXPENSE FOR PART OF A YEAR Annual Depreciation Expense ÷ $900. 00

CALCULATING DEPRECIATION EXPENSE FOR PART OF A YEAR Annual Depreciation Expense ÷ $900. 00 ÷ Months in a Year 12 Monthly Depreciation Expense Number of Months Asset Is Used $75. 00 5 Monthly Depreciation Expense $75. 00 = = Partial Year’s Depreciation = Expense = $375. 00 Lesson 21 -2, page 550 © South-Western Educational Publishing

CALCULATING ACCUMULATED DEPRECIATION 20 X 2 Accumulated Depreciation $400. 00 + + 20 X

CALCULATING ACCUMULATED DEPRECIATION 20 X 2 Accumulated Depreciation $400. 00 + + 20 X 3 Depreciation Expense $200. 00 = = 20 X 3 Accumulated Depreciation $600. 00 CALCULATING BOOK VALUE Original Cost – Accumulated Depreciation = Ending Book Value $1, 250. 00 – $600. 00 = $650. 00 Beginning Book Value – Annual Depreciation = Ending Book Value $850. 00 – $200. 00 = $650. 00 Lesson 21 -2, page 551 © South-Western Educational Publishing

TERMS REVIEW depreciation expense estimated salvage value straight-line method of depreciation accumulated depreciation book

TERMS REVIEW depreciation expense estimated salvage value straight-line method of depreciation accumulated depreciation book value of a plant asset Lesson 21 -2, page 552 © South-Western Educational Publishing