Review Ch. 9 page 397 examples STRAIGHT LINE DEPRECIATION 1.An equipment costs $5500 has a 5 year life and $500 salvage value. it uses straight line Depreciation. What is the depreciation amount for years 1 thru 5. Formula: S/L depreciation- Cost- Salvage Value /by Useful Life or years 2. A Machinery costs $9800 has a 10 year life and $800 salvage value it uses straight line Depreciation. What is the depreciation amount for years 1 thru 5. THE-UNITS OF OUTPUT METHOD DEPRECIATION page 403 examples 3. Robins purchased an equipment at a cost of $100,000 on January 1, 2014 The copier is expected to have salvage value of $10,000 at the end of its 4 years useful life. or to be used to make 1,000,000 copies Actual annual copies for year 2014 -200,000, yr 2015 400,000, year 2016 300,000 Calculate the Units of activities for the three years Cost- Salvage Value divided by unit of Activities 100000-10,000/1,000,000 ? Yr 2014 200,000 x = ? Yr 2015 400,00 x = ? Yr 2016 300,000 x ? 4, what is the distinction between a CAPITAL EXPENDITURE and a REVENUE EXPENDITURE? 5. Explain what is meant by an ACCELERATED DEPRECIATION method