Question

Computer the Depreciation Schedule by using SLD, SOYD, and DDB methods

the university pursed a lab Mass-Spectrometer that has 5 years depreciable life. The instrument costs school $900 with a Salvage Value of $70 after the end of the service life.

1-Built a Depreciation Schedule for this asset by all three methods

2-Build a graphic of each method

3-Which method will you recommend to the university and why?

Answer 1

Depreciation Schedule as per Double Decline Method
Year	Original Value (a)	Depreciable Value	Depreciation (b)	Accumulated Depreciation (c)	Book Value (a-c)	Calculation
1	$900	$900	$360	$360	$540	($900*40%)
2	$900	$540	$216	$576	$324	($15600*0.20*2)
3	$900	$324	$130	$706	$194	($9360*0.20*2)
4	$900	$194	$78	$783	$117	($$5616*0.20*2)
5	$900	$117	$47	$830	$70	($3370*0.20*2)
. Double Decline Method = Carrying value * (straight rate * 2) = 100/5*2=40%

Depreciation Schedule as per SLM
Year	Original Value (a)	Depreciable Value	Depreciation (b)	Accumulated Depreciation (c)	Book Value (a-c)
1	$830	$830	$166	$166	$664
2	$830	$664	$166	$332	$498
3	$830	$498	$166	$498	$332
4	$830	$332	$166	$664	$166
5	$830	$166	$166	$830	$0

Depreciation Schedule as per SOYD method
Year	Original Value (a)	Depreciable Value	Depreciation (b)	Accumulated Depreciation (c)	Book Value (a-c)	Calculation
1	$830	$830	$166	$166	276.67	(830*5/(5+4+3+2+1))
2	$830	$277	$166	$332	221.33	(830*4/(5+4+3+2+1))
3	$830	$221	$166	$498	166.00	(830*3/(5+4+3+2+1))
4	$830	$166	$166	$664	110.67	(830*2/(5+4+3+2+1))
5	$830	$111	$166	$830	55.33	(830*1/(5+4+3+2+1))