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Chapter 5

Example 2

Required:

Use the following information relating to an individual non-current asset
to calculate depreciation using the straight-line method.

Cost at the start of year 1 $12,000

Estimated useful life 10 years

Estimated residual value $2,000

Example 2: Solution

This would be presented in the annual financial statements as follows:

Year Cost $ Acc Dep $ SOFP CV SP/L Dep’n Exp

Year 1

Year 2

Year 3

Year 4

Year 5

Year 6

Year 7

Year 8

Year 9

Year 10

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