SkipCaptcha, Automoderated users, edit
8,856
edits
Changes
Jump to navigation
Jump to search
Line 11:
Line 11: − + + + + + + + + + + + + + + + + + +
→Example: add straight-line example
==Example==
==Example==
A company buys machinery for $50,000, expects it to last five years, and at that time have a residual value of $5,000. Under straight line depreciation methods, the machine would be depreciated at $7,000 per year.
A company buys machinery for $50,000, expects it to last five years, and at that time have a residual value of $5,000.
===Straight-Line Depreciation===
Under the straight-line method, the yearly depreciation is $9,000/year [($50,000 - $5,000) / 5 years]. This amount is recorded each year until, in Year 5, the residual value is reached.
{| class="wikitable"
|-
! Year !! Value at Year Beginning !! Depreciation !! Value at Year End
|-
| 1 || $50,000 || $9,000 || $41,000
|-
| 2 || $41,000 || $9,000 || $32,000
|-
| 3 || $32,000 || $9,000 || $23,000
|-
| 4 || $23,000 || $9,000 || $14,000
|-
| 5 || $14,000 || $9,000 || $5,000
|}
==U.S. Tax Code==
==U.S. Tax Code==