4 A conference table is purchase for 20000 The expected life

4 A conference table is purchase for $20,000. The expected life is 5 years after which it will be sold for $3,000. Find its book value and depreciation at the end of each year of its life using sum-of-year-digits method.

Solution

Cost of conference table = $20000

Expected life = 5 years

Salvage value = $3000

5 years

(5*6)/2 = 15

1

Year	Depreciation Base	Remaining life of machine	Depreciation Fraction	Depreciation Base	Book Value
1	17000	5	5/15	5666.67	11333.33
2	17000	4	4/15	4533.33	6800
3	17000	3	3/15	3400	3400
4	17000	2	2/15	2266.66	1133.33
5	17000	1	1/15	1133.33	0