Depreciation using Excel's Absolute Cell Referencing, SLN and DDB Functions Sullivan Ranch Corporation has purchased a new tractor and has provided the information related to this purchase and its asset information. The Controller has asked you to prepare three different depreciation schedules showing the Straight-Line, Units-Of-Production, and Double- Declining Balance methods. Use the information included in the Excel Simulation and the Excel functions described below to complete the task. Cell Reference: Allows you to refer to data from another cell in the worksheet. From the Excel Simulation below, if in a blank cell, "=B6" was entered, the formula would output the result from cell B6, or 1,200 in this example. Absolute Reference: Allows you to maintain the original cell reference when a formula is copied to another cell. The cell reference is "locked" by putting a dollar sign ($) before the column and row references. By default a cell reference is relative, so when you copy a formula to another cell the values update based on a relative reference. For example, if you copy the formula "-B8+B9" from cell C1 to cell C2, the formula in cell C2 will relatively update to be "-B9+B10" since the copied formula moved down one cell, the formula cell references also moved down one cell. Conversely, by adding the absolute cell reference "locks" to the equation, the formula will not change when copied to any other cell. For example, "-$B$8+$B$9" written in cell C1 is copied to cell C2, the formula in cell C2 will remain "=$B$8+$B$9". You can also use a mixed cell reference by only "locking" the column or row only ($B8 or B$8) which locks that specific column or row and the other reference becomes a relative reference and "moves" with the formula as its copied to another cell. For example, if you copy the formula "=B$8+B9" from cell C1 to cell C2, the formula in cell C2 will update to be "-B$8+B10" since the copied formula moved down one cell, the formula cell relative references also moved down one cell, but the absolute "locked" reference remained the same. Basic Math functions: Allows you to use the basic math symbols to perform mathematical functions. You can use the following keys: + (plus sign to add), - (minus sign to subtract), * (asterisk sign to multiply), and/ (forward slash to divide). From the Excel Simulation below, if in a blank cell "=B3+B4" was entered, the formula would add the values from those cells and output the result, or 160,000 in this example. If using the other math symbols the result would output an appropriate answer for its function. SUM function: Allows you to refer to multiple cells and adds all the values. You can add individual cell references or ranges to utilize this function. From the Excel Simulation below, if in a blank cell "=SUM(B8, B9,B10)" was entered, the formula would output the result of adding those three separate cells, or 980 in this example. Similarly, if in a blank cell "=SUM(B8:B10)" was entered, the formula would output the same result of adding those cells, except they are expressed as a range in the formula, and the result would be 980 in this example. SLN function: Allows you to calculate the depreciation of an asset using the straight-line depreciation method. The syntax of the SLN function is "=SLN(cost,salvage,life)" and outputs the depreciation for one period. The cost argument is the initial cost of the asset. The salvage argument is the salvage value at the end of the life of the asset. The life argument is the number of periods over which the asset is being depreciated, also called the useful life. DDB function: Allows you to calculate the depreciation of an asset using the double-declining balance method. The syntax of the DDB function is "=DDB(cost,salvage, life,period,[factor]) and outputs the depreciation for one period. The function must include the first four arguments and has a fifth optional argument. The cost argument is the initial cost of the asset. The salvage argument is the salvage value at the end of the life of the asset. The life argument is the number of periods over which the asset is being depreciated, also called FILE HOME INSERT PAGE LAYOUT FORMULAS DATA REVIEW VIEW Calibri 11 - ' ' % Paste Clipboard 1 BIU Alignment Number Conditional Format as Cell Cells Editing Formatting Table Styles Font fx B Styles A Sullivan Ranch Corporation has purchased a new tractor. The following D 1 Sullivan Ranch Corporation has purchased a new tractor. The following information is given: E 2 3 Cost: $ 150,000 4 Estimated Residual: $ 10,000 5 Estimated Life in years: 4 6 7 8 9 E2 12 6 Estimated Life in hours: 1200 7 Actual Hours: Year 1 Year 2 360 270 10 Year 3 11 Year 4 350 220 Sign In F v Prepare the following Straight Line depreciation schedule by using the excel SLN FUNCTION (fx) to calculate the 13 Depreciation Expense for Years 1-4 in the Depreciation Expense column. Enter formulas or absolute cell references for the remaining cells. 14 18 19 20 21 1567% 22 SULLIVAN RANCH CORPORATION Depreciation Schedule-Straight Line Method End of year amounts Year Depreciation Expense 1 2 3 Sheet1 Accumulated Depreciation Book Value FILE HOME INSERT PAGE LAYOUT FORMULAS DATA REVIEW VIEW Calibri 11 - ' ' % Paste Clipboard 22 23 24 BIU Font Alignment Number Conditional Format as Cell Formatting Table Styles Styles Cells Editing fx Sullivan Ranch Corporation has purchased a new tractor. The following A B 3 4 Total D 27 28 25 Prepare the following Units-of-Production depreciation schedule by entering formulas. 26 Use absolute cell references when appropriate. SULLIVAN RANCH CORPORATION Depreciation Schedule-Units-of-Production Method 29 End of year amounts 30 Year Depreciation Expense Accumulated Depreciation 31 1 32 2 33 3 34 35 4 Total 36 37 38 39 40 41 42 E Book Value F Sign In Prepare the following Double-Declining-Balance depreciation schedule by using the Excel DDB FUNCTION (fx) to calculate Depreciation Expense for Years 1-4 in the Depreciation Expense column. Enter formulas or absolute cell references for the remaining cells. Sheet1 SULLIVAN RANCH CORPORATION Depreciation Schedule-Double-Declining-Balance Method End of year amounts Depreciation Accumulated v FILE HOME INSERT PAGE LAYOUT FORMULAS DATA REVIEW VIEW Calibri 11 - ' ' % Paste Clipboard 33 34 35 36 37 8 = BIU Font A B 3 4 Total Alignment Number Conditional Format as Cell Formatting Table Styles Styles Cells Editing fx Sullivan Ranch Corporation has purchased a new tractor. The following D E F Sign In Prepare the following Double-Declining-Balance depreciation schedule by using the Excel DDB FUNCTION (fx) to calculate Depreciation Expense for Years 1-4 in the Depreciation Expense column. Enter formulas or absolute cell references for the remaining cells. Sheet1 SULLIVAN RANCH CORPORATION Depreciation Schedule-Double-Declining-Balance Method End of year amounts Depreciation Year Expense 1 2 3 4 Total Accumulated Book Value Depreciation v