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When a corporation uses - sum of the years digits method - for its fixed assets depreciation:

For purchasing an equipment sum of $100,000 , ten years useful life and no salvage value . What is the value of the depreciation expense for the first three years ?

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Question added by Deleted user
Date Posted: 2015/09/18
IMRAN ALI MOHAMMED
by IMRAN ALI MOHAMMED , Accounts Officer , M/s. Euro Glazing Ltd

The sum of years digits formula for depreciation is n(n+1)/2, where n stands for useful life of years. Here as the useful life is10 years, the formula is10(10+1)/2 =55

 

For the1st year the depreciation will be100,000*10/55=  $18,182

For the2nd year the depreciation will be100,000*9/55=   $16,364

 

For the3rd year the depreciation will be100,000*8/55=    $14,545

Asher Ahsan
by Asher Ahsan , freelancer sales , WirelessExcellence(UK)

Have never been involved for such a study

Anuj Gupta
by Anuj Gupta , Credit Controller , Atlas Printing Press LLC

The Depreciation is10000$ for eash year since it should be depreciated over a period of life.

Mohamed Ghazi CMA
by Mohamed Ghazi CMA , Finance and Budget Manager , Ernst & Young

 the answer

=100000(10/55)=18182 for the1st year 

=100000(9/55)=16364for the2nd year 

=100000(8/55)=14545for the3rd year 

total =49090.91$

Ahmed Taha
by Ahmed Taha , Chief Accountant & Financial Auditor , DM Group

First year                      = $18,181.82

Second year                 = $16,363.64

Third year                     = $14,545.45

 

Total Depn. Expenses = $49,090.91

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