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What does straight line depreciation over 5 years to a residual cost of 20 percent mean?
Wiki User
∙ 13y ago
It means that, over a 5 year period, the value of the asset falls by 80 per cent (100 - 20 = 80).
This is STRAIGHT line so that every year the depreciation 16% of the price at the start of the whole PERIOD.
In calculating depreciation in the normal way, the depreciation each year is a percentage of the price at the start of that YEAR.
Wiki User
∙ 13y ago
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why Novelty Chemicals bought a Motor Vehicle for$110,000 on January 5, 2016. The estimated usefullife of the vehicle is ten years. The disposal valueis estimated at $10,000. Annual depreciation is onthe straight line method?
Novelty Chemicals bought a Motor Vehicle for $110,000 on January 5, 2016. The estimated useful life of the vehicle is ten years. The disposal value is estimated at $10,000. Annual depreciation is on the straight line method. Required for years 2016, 2017 and 2018: a) The Motor Vehicle A/c. b) The Provision for depreciation A/c. c) The Profit and Loss accounts extracts for annual depreciation. d) The Balance Sheet extracts for motor vehicle and its related depreciation. full question
A stock produced returns of 11 percent -14 percent and 3 percent over three of the past four years The arithmetic average for the past four years is 6.5 percent?
A stock produced returns of 11 percent, -14 percent, and 3 percent over three of the past four years. The arithmetic average for the past four years is 6.5 percent. What is the standard deviation of the stock's returns for this four year period?
What is 65 percent out of three years?
1.95 years.
What is 85 percent of 6 years?
5.1 years
What is 85 percent of 11 years?
85% of 11 years = 9.35 years.
Which depreciation method does not use residual value in calculating the first years depreciation expense?
Declining-Balance
Depreciation straight line method?
Straight line depreciation method is that method in which fixed amount of depreciation is charged to all fiscal years in which that asset is used.
Straight line method of depreciation?
Straight line depreciation method is that method in which fixed amount of depreciation is charged to all fiscal years in which that asset is used.
Which type of depreciation method accelerates depreciation in the early years of an asset life?
Straight line
What is the definition for 'residual value'?
Residual value is the future value of a good after depreciation of its initial value. For example you bought a car for $20,000. After two years and 60,000 of mileage it will value of $10,000.
What are differences between Straight - Line and Diminishing Balance Methods of charging depreciation?
The straight line method assumes that the useful life of an asset is evenly distributed to its life, so results in a constant depreciation charge per year provided the estimated residual value remains constant over the life of the asset. for example, Asset's value = $100,000 useful life = 10 years residual value = $20,000 depreciation per year = (100,000 - 20,000)/10 = $8000 per year The diminishing balance method assumes that the asset is more useful on the early days and less useful in the later days, so it results in more depreciation charge in the early years and the charge decreases as the asset becomes old. for example, Asset's value = $100,000 residual value = $20,500 depreciation rate = 10% useful life = 15 years depreciation year 1. (100,000 * 10%) = 10,000 depreciation year 2. (100,000 - 10,000 W1) * 10% = 9000 depreciation year 3. (100,000 - 19,000 W2)* 10% = 8100 depreciation year 4. (100,000 - 27,100 W3)* 10% = 7290 W1 = depreciation of year 1 W2 = depreciation of year 1 and year 2 combined W3 = depreciation of year 1, year 2 and year 3 combined
A van purchased for 44000 is depreciated over 5 years using straight line depreciation what is the depreciation equation?
the depreciation equation =asset price / 5 =44000/5 =8800
Record depreciation on the remaining truck it has an estimated residual value of 15000 and estimated useful life of eight years?
James' mom purchased a new truck for $39,310 four years ago. James, who is a mechanic, estimated that the truck's present value is $25,250. What is her depreciation? Formula: Depreciation = Purchase Price - Today's Value/Number of Years Owned
What is the different sum-of-the-year digits method versus the straight line method?
The sum-of-the-year digits method is an accelerated depreciation method that allocates a larger portion of the asset's cost to the early years of its useful life, while the straight-line method evenly distributes the depreciation expense over the asset's useful life. As a result, the sum-of-the-year digits method results in higher depreciation expense in the earlier years and lower depreciation expense in the later years compared to the straight-line method.
What disclosure is required for a change from sum of the years digits to a straight line Method?
re-computation of current and future years' depreciation
Why accumulated depreciation is credited explain with example?
Accumulated depreciation is contra for related assets shows in balance sheet to show the reduction in actual cost of asset Example: if 1 asset purchased for 100 for 10 years then per year depreciation is 10 with straight line depreciation so after ten years actual cost will be nill while accumulated depreciation will be 100.
What Identify three types of depreciation policy that could be used?
Three types of depreciation policies that could be used are straight-line, reducing balance or declining balance, and sum-of-the-years'-digits. The straight-line method spreads the cost of an asset equally over its useful life. The reducing balance method applies a higher depreciation rate to the asset's initial cost, resulting in larger deductions in the earlier years. The sum-of-the-years'-digits method accelerates depreciation by assigning higher depreciation rates to the earlier years and lower rates to the later years.
