Calculate the amount of depreciation in year 3 of the assets useful life assuming the following facts.
Cost of asset $11,000
Salvage Value $1,000
Useful life is four years
Sum of years digit method is used to calculate

Question

Calculate the amount of depreciation in year 3 of the assets useful life assuming the following facts.

Cost of asset $11,000
Salvage Value $1,000
Useful life is four years
Sum of years digit method is used to calculate

TheoryPractice · Accepted Answer

2,000. The sum of years digits is calculated based on the useful life (1+2+3+4) = 10

The depreciable base is Cost of asset - salvage value (11,000-1,000) = 10,000

Depreciation Schedule:

1st year (4/10) x 10,000 = 4,000

2nd year (3/10) x 10,000 = 3,000

3rd year (2/10) x 10,000 = 2,000

4th year (1/10) x 10,000 = 1,000.

Calculate the amount of depreciation in year 3 of the assets useful life assuming the following facts. <ol><li>Cost of asset $11,000</li><li>Salvage Value $1,000</li><li>Useful life is four years</li><li>Sum of years digit method is used to calculate </li></ol>

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