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| Straight Line Depreciation Examples |
| Straight Line Depreciation Examples Example 1 1. straight line depreciation Cost of asset = $100,000 Estimated residual value = $10,000 Estimated useful life of asset = 5 years = 60 months Depreciation base = cost - residual value = $100,000 - $10,000 = $90,000 Depreciation amount for each year = (cost - residual value) x 1 / useful life = ($100,000 - $10,000) x 1 / 5 years = $90,000 / 5 = $18,000 per year Depreciation amount for each month = (cost - residual value) x 1 / useful life = ($100,000 - $10,000) x 1 / 60 months = $90,000 / 60 = $1,500 per month Example 2 2. straight line depreciation Cost of asset = $800,000 Estimated residual value = 10% of the cost Estimated useful life of asset = 10 years = 120 months Depreciation base = cost - residual value = $800,000 - $80,000 = $720,000 Depreciation amount for each year = (cost - residual value) x 1 / useful life = ($800,000 - $80,000) x 1 / 10 years = $720,000 / 10 = $72,000 per year Depreciation amount for each month = (cost - residual value) x 1 / useful life = ($800,000 - $80,000) x 1 / 60 months = $720,000 / 120 = $6,000 per month Back to Overview of Depreciation |
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