Straight line | Doble declining | Sum of Year Digits | |
Year 1 | $300,000-10,000/15 = $19,333 | $300,000*13.33% = $39,990 | $300,000*15/120 = $37,500 |
Year 2 | 19,333 | $(300,000-39,990) * 13.33% = $34,659 | $300,000*14/120 = $35,000 |
Year 3 | 19,333 | $(300,000-39,990-34,659) *13.33% = $30,039 | $300,000*13/120 = $32,500 |
Year 4 | 19,333 | $(300,000-39,990-34,659-30,039)* 13.33% = $26,035 | $300,000*12/120 = $30,000 |
Sum of year digit method: | $300,000-10,000 * 12/120 | $29,000 |
Doble declining balance method: Depreciation rate = 100/15*2 = 13.33% |
($300,000-13.33%) * 13.33% | $34,659 |
Revised depreciation expense : Depreciation expense for year1 and 2 = $300,000-10,000/15 = $19,333*2 = $38,666 Book value as on Year 3 = $300,000-38,666 = $261,334 |
$261,334-5,000/10 | $25,633 |
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