Depreciation Schedule Research Paper Example | Topics and Well Written Essays - 500 words

wear and tear Schedule - Research Paper ExampleThe store derogation is arrived at by adding the current years wear and tear and the all the prior years depreciation. The allow value is arrived at by the formula cost less accumulated depreciation. The accumulated depreciation figures are $300 for year 1, $600 for year 2, $900 for year 3 and $1,200 for year 4. The book value figures are $ 900 for year 1, $600 for year 2, $ 300 for year 3, and $0 for year 4(Smith, 2004).The above stick out computation shows that depreciation expense for year 1 is $4,800. Under the double declining balance method, the straight government note depreciation rate is first computed by dividing 1 by the 5 year life of the asset. The number is 20%. This is then doubled to get 40%. Next, the first year depreciation is arrived at by multiplying the cost of $12,000 by 40% to arrive at the first years depreciation of $4,800. Then the bet on years depreciation is arrived at by multiplying 40% by the prior years book value of $7,200 to arrive at $2,880. This is the second years depreciation. On the third year, the book value of $4,320 is deducted the scrap or salvage value of $3,000 to arrive at the third years depreciation. The third years depreciation is $1,320. The book value figures are $7,200 for the first year, $4,320 for the second year, and finally $3,000 on the third year (Hall & Aldridge, 2007).