Depreciation Methods Depreciation Methods

Akron Incorporated purchased an asset on September $1$ of Year $1$ for $$375,000.$ The estimated residual value is $$15,000.$ Akron estimates that the asset has a service life of $5$ years.

Calculate the depreciation for Year $1$ using the sum$-$of$-$the$-$years'$-$digits method.

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Calculate the depreciation for Year $2$ using the sum$-$of$-$the$-$years'$-$digits method.

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constant, while the fraction decreases each year.

depreciation expense into adjacent fiscal years based on the number of months.

Example

If the sum$-$of$-$the$-$years'$-$digits depreciation method is used you should compute depreciation expense as follows:

Akron Incorporated purchased an asset on September $1$ of Year $1$ for $$375,000.$ The estimated residual value is $$15,000.$ Akron estimates that the asset has a service life of $5$ years.

Calculate the depreciation for Year $1$ using the sum$-$of$-$the$-$years'$-$digits method.

$fill in the blank $1$

Calculate the depreciation for Year $2$ using the sum$-$of$-$the$-$years'$-$digits method.

$fill in the blank $2$