Class: Accounting/farm management

Theme: Depreciation

The owner of the farm wants to calculate the value of 6 Dorper sheep that she has. The sheep cost $300 each, have an expected useful life of 7 years, and a salvage value of $20 each.

1. Using the straight-line depreciation method, what is the annual depreciation per sheep?

2. Graph how the value of one of these sheep changes if annual depreciation is taken into account, for the straight-line method.

3. Using the straight-line depreciation method, what is the book value of the 6 sheep at 30 months? Build the depreciation table.

4. Using the simple declining balance method, what is the book value of the 6 sheep at 30 months? Build the depreciation table.