Straight line depreciation is the simplest to determine. Basically you take 100% and divide it by the # of years, so on your problem you take 100% / 5- 20% for each year. STRAIGHT LINE DEPRECIATION EXAMPLE $100,000 with a 5 year life expectancy $100,000 /5 years $20.000 per year You have a $20.000 truck that you think has a 4 year life expectancy and no salvage value. Using straight line depreciation show the depreciation for each year. I'VE COMPLETED THE FIRST TWO YEARS FOR YOU TO GIVE YOU THE ROAD MAP ON HOW TO COMPLETE ALL 3 DEPRECIATION EXAMPLES Original value $20.000 Less Salvage-0 Amount to Depreciate $20,.000 BOOK VALUE YEAR RATE OF DEPRECIATION ACCUMULATED THIS YEAR's DEPRECIATED AMOUNT $5000 $5000 $5000 $10.000 Year 1 25% 15.000 Year 2 25% $10,000 Year 3 Year 4 Totals + Salvage value if any Value at end of year 5 There are numerous accelerated plans -This one is -DECLINING BALANCE Example. No salvage value used in this example, $100,000 over 5 years 5+4+3+2+1 15 Year 1 5/15 X $100,000 Year 2 4/15 X $100,000 Year 3 3/15 X $100,000 Year 4 2/15 X $100,000 Year 5 1/15 X $100,000 For your problem you have 4 years so you add the 4 years (4+ 3+ 2+ 1)- 10 Then you start with 4/10. 3/10. 2/10, the 1/10 DECLINING BALANCE depreciation with no salvage value $200,000 plece of machinery with an expected 4 year Original value Less Salvage Amount to depreciate ACCUMULATED THIS YEAR'S DEPRECIATED AMOUNT 80.000 BOOK VALUE RATE OF DEPRECIATION YEAR 120,000 60,000 80,000 60.000 4/10 Year 1 Year 2 3/10 Year 3 Year 4 Totals + Salvage value if any Value at end of year UNITS OF ACTIVITY You take the % of expected usage and multiple it times the total costs of the machine Units of Activity depreciation with no salvage value. Expected rate of usage Year 1-20%, year 2-25%, Year 3- 20%, Year 4-15%, year 5 - 10% -- year 6 10% $120,000 piece of machinery with an expected 6 year Original value 120,000 Less Salvage 0 Amount to 120,000 Depreciate ACCUMULATED THIS YEAR'S DEPRECIATED AMOUNT BOOK VALUE YEAR RATE OF DEPRECIATION Year 1 24,000 24,000 $96.,000 20% Year 2 Year 3 Year 4 Year 5 Year 6 + Salvage value if any Value at end of year $