Using Excel to Calculate Depreciation

As long as the cost, salvage value, and useful life of the asset are provided in the worksheet,

The following functions can be used to determine the applicable depreciation expense. Note that the

period must also be entered when calculating depreciation expenses under the sum of the

years digits and double-declining balance methods. This allows Excel to determine the proper

depreciation for each year of the assets useful life.

Lets assume that we have an asset with a 10-year useful life, a cost of $207,000, and a salvage value of $7,000. Complete an Excel worksheet in which you calculate depreciation for each of the first TWO years of the assets useful life under the Straight-Line Depreciation Method.

Now repeat the above process, this time using the Sum of the Years Digits Depreciation Method.

Lastly, repeat the process using the Double-Declining Balance Depreciation Method.

B 14 Cost 12400 15 Salvage Value 2400 16 Useful Life 10 17 Period 4 TO 19 =SLN(C14, C15, C16) Straight-Line Depreciation 20 =SYD(C14, C15,C16,C17) Sum of the Years' Digits Depreciation 21 =DDB(C14,C15, C16,017) Double-Declining Balance Depreciation