Problem VI: Depreciation Example: Truck Cost $20,000. Salvage $1,000 Life in years 5 Years. Life in miles 50,000 miles Truck used 12,000 miles in 2020 used 15,000 miles in 2021 Straight Line Deprecation: (Cost - Salvage) / Life in years Cost Salvage Life in Depreciation Years Expense 20,000 1,000 2020 20,000 1,000 2021 5 5 Units Method: ((Cost - salvage)Life in units) * units used Cost Salvage Life in Miles Used Depreciation Miles Expense 20.000 1,000 50.000 12.000 2020 20.000 1.000 50,000 15,000 2021 Double Declining Balance Method: (2/ life * (Cost - Beg Accum Depn) 2/Life Cost Beg Accum Depn 0 Depreciation Expense 2/5 2/5 2/5 20,000 20,000 20,000 2020 2021 2022 Book Value = Cost - Accumulated Depreciation What is the book value? Book value is Cost of the truck-accumulated depreciation. Straight Line Method Straight Line Method - Book Value Example: 2020 2021 Cost 20,000 20,000 Accum Depn Book Value Units Method - Book Value Example: 2020 2021 Cost 20.000 20.000 Accum Dean Book Value a Double Declining Method - Book Value Example 2020 2021 Cost 20.000 20.000 Accum Depn Book Value