2. 
Presented By:
Sunny Khatana
Computer Science Engg.
University Of Gujrat

3. 
 A reduction in the value of an asset with the passage
of time, due in particular to wear and tear.
Defination

4. Here The Four Methods are described:
 Straight Line Method
 MACR’S Method
 Double Decline Method
 Sum Of The Year Method
Methods

5. 
Cost of Asset=10,500
Salvage Value/Residual Value=500
Life years=5
Straight Line Method

6. 
10,000 cost - 500 salvage value/5 = 2000 per year
year cost Depreciation Accumulated Book
Expense Depreciation Value
 1 10,500 2,000 2,000 8,500
 2 10,500 2,000 4,000 6,500
 3 10,500 2,000 6,000 4,500
 4 10,500 2,000 8,000 2,500
 5 10,500 2,000 10,000 0

7. 
cost =2,50,000
year cost Depreciation Accumulated Book
Expense Dep value
 1 250000*35% 87,500 87,500 162500
 2 250000*15% 37500 12500 125000
 3 250000*20% 50000 175000 75000
 4 250000*15% 37500 212500 37500
 5 250000*15% 37500 250000 0
MACR’S(Modified Accelerated cost Recovery System)

8. 
Here
Year= 6
n=6
n(n+1)/2= 6(6+1)/2= 42/2 =21
Cost= 2,50,000
Also
6+5+4+3+2+1=21
Sum Of the Year By Digit
Method

9. Cost Depreciation Accumulated Book
Dep value
250000*6/21 71428.57 71428.57 178571.43
250000*5/21 59523.80 130952.37 119047.63
250000*4/21 47619.04 178571.41 71428.59
250000*3/21 35714.28 214285.69 3571.31
250000*2/21 23809.52 238095.21 11904.76
250000*1/21 11904.76 2,50,000 0

10. 
Cost of asset = $100,000
Estimated residual value = $10,000
Estimated useful life of asset = 5 years
Depreciation rate = (1/useful life) x 200%
= 1/5 x 200% = 20% x 2 = 40%
Double Declining Balance
Method

11. 
Cost Depreciation Accumulated Book
Dep value
100000*40% 40000 40000 60000
60,000*40% 24000 64000 36000
36000*40% 14400 78400 21600
21600*40% 8640 87040 12960
12960*40% 2960(*) 90000 10000
(*)
Depreciation stops when book value=Residual value