PDA

View Full Version : This deals with depreciation


johnsonmj2
Apr 10, 2012, 11:44 AM
the question is: I purchased a van for $25,000. In addition I had to paid sales tax and title fees of $1,000. The van has an expected life of four-year life and the salvage value of $6,000. Can you help me find the depreciation using the straight-line method?

pready
Apr 10, 2012, 12:52 PM
Add your cost and the tax fees to get your Book value. Now take this figure and subtract your salavage value to get your depreciable base. Finally take your depreciable base and divide it by the number of years useful life to get your depreciation per year.

paraclete
Apr 10, 2012, 05:57 PM
You will depreciate the total sum paid. The period is four years so the rate is 25%. You should apportion the first year according to the remaining days in the financial year after the date of purchase