Activity: Straight-line Depreciation

Equipment acquired at the beginning of the year at a cost of $125,000 has an estimate residual value of $5,000 and an estimated useful life of 10 years.

Determine the:

Depreciable cost

Annual straight-line depreciation

Document the depreciation expense for the 10 years

Activity: Units-of-Output

Equipment acquired at the beginning of the year at a cost of $24,000 has an estimated residual value of $2,000 and an estimated useful life of 10,000 hours and was operated 2,100 hours during the first year and 3,600 during the second year.

Determine the:

Depreciation per unit

Depreciation expense for years 1 and 2

Activity: Double-Declining Balance Method

Equipment cost $24,000

Useful Life 5 years

Residual value $2000

Calculate the double-declining rate to depreciate the equipment

Use table to document and calculate the depreciation expense for the equipment

Partial-Year Depreciation

When a plant asset is acquired during the year, depreciation is calculated for the fraction of the year the asset is owned.

Example: Assume our machinery was purchased on October 8, 2014. Calculate the depreciation expense for December 31, 2014 using the straight-line method.