ote Show all of your work to arrive at a final result 1 Usin

ote: Show all of your work to arrive at a final result 1) Using sum-of-the-years-digits depreciation, determine the depreciation schedule for an asset that has an initial cost of $140,000, a salvage value of $20,000, and a depreciation life of three years.

Solution

Ans :

I = $ 140,000

S = $ 20,000

n = 3 years

Formula for deprication = [ ( n - t +1 ) * ( I - S )] / N

Where , t = the year for which the depreciation is being estimated.

N = sum of the year upto the life span ( n ) = 1+ 2 +3 = 6 years

Year	Depreciation Base ( $ )	Depreciation Rate ($ )	Depreciation amount ($ )	Book Value ($)
1	$ 120, 000	3/6	60000	60000
2	$ 120, 000	2/6	40000	20000
3	$ 120, 000	1/6	20000	0