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Chapter 20
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 12,000 1,000 11,000 1,000
Year 2 12,000 2,000 10,000 1,000
Year 3 12,000 3,000 9,000 1,000
Year 4 12,000 4,000 8,000 1,000
Year 5 12,000 5,000 7,000 1,000
Year 6 12,000 6,000 6,000 1,000
Year 7 12,000 7,000 5,000 1,000
Year 8 12,000 8,000 4,000 1,000
Year 9 12,000 9,000 3,000 1,000
Year 10 12,000 10,000 2,000 1,000
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