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    moonkhan's Avatar
    moonkhan Posts: 32, Reputation: 1
    Junior Member
    		  
    #1

    Feb 25, 2011, 10:41 PM
    straight line depreciation
    I am really confused to calculate the Depriciation expense for Dec, 2008. The question is like this.
    In 2007, Cost of truck is $22,000, estimated life year is 5 years, and salvage value is $2000. The recorded annual straight line depreciation for December 2007 is $4000 as I recorded.
    1n 2008, the truck's estimated useful life was changed from five to four years and salvage value is $2400.I need to record the annual Straight line depreciation on the truck. According to my calculations, it is $4900, but when I match the answer, it should be equal to $5,200. Can anybody help me please. I AM VERY VERY CONFUSED
    pready's Avatar
    pready Posts: 3,197, Reputation: 207
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    #2

    Feb 25, 2011, 10:51 PM

    he 2008 remaining book value is $18,000 ($22,000 cost - $4,000 depreciation year 1).
    Now you take $18,000 less the new salvage value of $2,400 to get your depreciable base, then take this number and divide it by 3 to get your depreciation per year because you used one year of depreciation already and your remaining useful life is 3 years.
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