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 2014200,000, 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