What Is Depreciation?
Depreciation spreads the cost of something you use over the years you use it.
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1.What is depreciation?
Depreciation spreads the cost of something you use over the years you use it.
2.What is the salvage value in the roaster example?
Marge guesses five years of use and a sale for about 2,000 at the end, which is the salvage value.
3.What is straight-line depreciation per year in the example?
(12,000 minus 2,000) divided by five years is 2,000 a year, so the book value falls 10,000, 8,000 and so on to 2,000.
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Sources (2)
- Internal Revenue Service: Publication 946, How To Depreciate Property
- Eigene Berechnung (synthetisches Rechenbeispiel
Education only. Not financial advice.