#97 Accelerated Depreciation Methods

Question 1

Explain the “sum of years digits” method of depreciation

Answer 1

You take the remaining life of the asset (in years) and divide it by the sum of years digits. Then you multiply this figure by the total depreciable amount of the asset (cost - salvage value).

Question 2

What is the formula to calculate the sum of years digits?

Answer 2

N (N + 1) / 2

Where N = Life of Asset (years)

Question 3

With the declining balance method, the salvage value is not used.

True or False?

Answer 3

True

Question 4

How do you solve for depreciation using the double declining balance method?

Answer 4

You take the cost - accumulated depreciation and multiply it by ( 2 / Life of asset )