Example of Straight-line Depreciation

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Example of Straight-line Depreciation
Junaid, Pakistan
Please tell me about the depreciation schedule using straight line method. Please explain with the schedule so i could learn easily from your answer. Thank you

Straight Line Depreciation Method
Zubair Sadat, Financial Consultant, Afghanistan
Dear Junaid,
Please refer to below the straight line depreciation method and schedule.

On April 1, 2011, company XYZ has purchased an equipment at the cost of $140,000.
The equipment is estimated to have 5 years useful life.
At the end of the 5th year the salvage value (residual value) will be $20,000.
Company XYZ recognizes depreciation to the nearest whole month.
Calculate the depreciation expenses for 2011, 2012 and 2013 using the straight line depreciation method.
Depreciation for 2011
= ($140,000 - $20,000) x 1/5 x 9/12 = $18,000
Depreciation for 2012
= ($140,000 - $20,000) x 1/5 x 12/12 = $24,000
Depreciation for 2013
= ($140,000 - $20,000) x 1/5 x 12/12 = $24,000
If you have any questions, please contact me
Best of luck!



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