Straight Line Depreciation Method
The straight-line method is also called the fixed percentage method of the purchase price of the asset. Based on the straight-line method the amount of depreciation expense annually is fixed which is defined by the following formula:
The amount of depreciation r is defined by the formula:
Information :
A = Cost of assets is the amount of costs incurred by the company to acquire an activation until the asset is ready to be operated.
S = Estimated residual value of the asset is the value of the appraisal that may be obtained through the assets that have passed its life.
r = Depreciation rate or percentage depreciation
n = Age of benefit / Age of economic assets in the year.
D = Depreciation expense for each period
An asset at a cost of $5,000,000. It is estimated that the asset can be utilized for 6 years with an estimated residual value of $2,000,000. Using the straight-line method, please determine the amount of depreciation expense annually!
Answer:
A = $5,000,000
S = $2,000,000
n = 6 years
So the amount of depreciation each year is $600,000 .
Similarly this article.
Sorry if there is a wrong word.
The end of word wassalamualaikum wr. wb
Referensi :
Formula of Straight Line Depreciation Method
The amount of depreciation r is defined by the formula:
Information :
A = Cost of assets is the amount of costs incurred by the company to acquire an activation until the asset is ready to be operated.
S = Estimated residual value of the asset is the value of the appraisal that may be obtained through the assets that have passed its life.
r = Depreciation rate or percentage depreciation
n = Age of benefit / Age of economic assets in the year.
D = Depreciation expense for each period
Example Question of Straight Line Depreciation Method
Answer:
A = $5,000,000
S = $2,000,000
n = 6 years
So the amount of depreciation each year is $600,000 .
Similarly this article.
Sorry if there is a wrong word.
The end of word wassalamualaikum wr. wb
Referensi :
- To'Ali's book math group accounting and sales
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