Example $1$: Lama Company purchased a building for $$35,000$ on January $1,2011.$ The building was assigned an estimated useful life of $10$ years and has a residual value of $$10,000.$

Using Straight line method:

Step $1$: depreciation expense $=($cost$-$ salvage value$)/$ useful life

Compute:

$1-$ depreciation expense for the years $2011$

$2-$ depreciation expense for the years $2012$

$3-$ accumulated depreciation at Dec $31,2011$

$4-$ accumulated depreciation at Dec $31,2012$

$5-$ accumulated depreciation at Dec $31,2020($end of useful life$)$

$6-$ book value of the building at Dec $31,2011$

$7-$ book value of the building at Dec $31,2012$

$8-$ book value of the building at Dec $31,2020($end of useful life$)$

$9-$ depreciation rate

$10-$ calculate dep exp for $2011$ using dep rate