instructions for how to create a straight line depreciation schedule
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How to create a straight line depreciation scheduleTRANSCRIPT
Instructions for Straight Line Depreciation Schedule
MJC Revised 11/2011 Page 1
Love Thy Pets Inc.,
Straight Line Depreciation Schedule
For 5-Year Asset
1 Cost of Asset 20,000
2 Residual Value 5,000
3 Useful Life 5
4
A
Year
B
End of Year
C
Cost of Asset
D
Depreciation
expense for year
E
Accumulated
depreciation at
end of year
F
Book Value at end
of year (Cost –
Accumulated
depreciation)
5 2000 1 $20,000 $3,000 $3,000 $17,000
6 2001 2 $20,000 $3,000 $6,000 $14,000
7 2002 3 $20,000 $3,000 $9,000 $11,000
8 2003 4 $20,000 $3,000 $12,000 $8,000
9 2004 5 $20,000 $3,000 $15,000 $5,000
Systematic Instructions
Always start with the three-line header, which includes the name of the corporation, the type of
depreciation method used for the schedule, and the number of years the asset is useful for your
corporation.
1. On line one place the title “Cost of Asset” in the left column. In the right column place,
the dollar amount the corporation paid for the asset.
2. On line two, place the title “Residual Value in the left column. In the right column place,
the dollar amount that the corporation expects the asset will be worth at the end of its
useful life to the corporation.
3. On line three, place the title “Useful Life” in the left column. In the right column place,
the number of years that the corporation expects the asset will be useful to the
corporation.
4. On line four, copy the headers you see in the example.
5. In Column A, place the years in order of usage of the assets.
6. In Column B, place the end of the year numbered by the life of the asset.
7. In column C, place the value of the asset. Repeat the number for the total length of the
useful life.
Instructions for Straight Line Depreciation Schedule
MJC Revised 11/2011 Page 2
8. In column D, first calculate the annual depreciation by the formulae:
Cost of Asset – Residual Value
Useful Life
20,000 – 5,000
5
= 3,000 per year
Place that dollar amount in the column D on lines 5 through 9.
9. In column E, start with the first years annual depreciation on line 5 then for each line 6
through 9 add another $3,000 to get the dollar amount.
10. In column F, take the dollar amount for column C and subtract the dollar value from
column E to get the dollar amount for column F on lines 5 thought 9.