Instructions for Straight Line Depreciation Schedule

Love Thy Pets Inc., Straight Line Depreciation Schedule For 5-Year Asset 1 2 3 Cost of Asset Residual Value Useful Life A Year 4 5 6 7 8 9 2000 2001 2002 2003 2004 B End of Year 1 2 3 4 5 C Cost of Asset $20,000 $20,000 $20,000 $20,000 $20,000 D Depreciation expense for year $3,000 $3,000 $3,000 $3,000 $3,000 E Accumulated depreciation at end of year $3,000 $6,000 $9,000 $12,000 $15,000 20,000 5,000 5 F Book Value at end of year (Cost – Accumulated depreciation) $17,000 $14,000 $11,000 $8,000 $5,000

Systematic Instructions
Always start with the three-line header, which includes the name of the corporation, the type of depreciation method used for the schedule, and the number of years the asset is useful for your corporation. 1. On line one place the title “Cost of Asset” in the left column. In the right column place, the dollar amount the corporation paid for the asset. 2. On line two, place the title “Residual Value in the left column. In the right column place, the dollar amount that the corporation expects the asset will be worth at the end of its useful life to the corporation. 3. On line three, place the title “Useful Life” in the left column. In the right column place, the number of years that the corporation expects the asset will be useful to the corporation. 4. On line four, copy the headers you see in the example. 5. In Column A, place the years in order of usage of the assets. 6. In Column B, place the end of the year numbered by the life of the asset. 7. In column C, place the value of the asset. Repeat the number for the total length of the useful life.

MJC Revised 11/2011

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Instructions for Straight Line Depreciation Schedule
8. In column D, first calculate the annual depreciation by the formulae: Cost of Asset – Residual Value Useful Life 20,000 – 5,000 5 = 3,000 per year Place that dollar amount in the column D on lines 5 through 9. 9. In column E, start with the first years annual depreciation on line 5 then for each line 6 through 9 add another $3,000 to get the dollar amount. 10. In column F, take the dollar amount for column C and subtract the dollar value from column E to get the dollar amount for column F on lines 5 thought 9.

MJC Revised 11/2011

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