Calculating Depreciation Using Straight-Line Method
Calculation of Depreciation for 2024 and Book Value on December 31, 2024
Using the straight-line method, depreciation for 2024 can be calculated by applying the formula mentioned earlier. Let's assume the cost of the asset is $10,000, the salvage value is $2,000, and the useful life is 5 years.
Plugging the values into the formula:
Depreciation Expense = ($10,000 - $2,000) / 5 = $1,600 per year
Therefore, the depreciation for 2024 would be $1,600.
To find the book value on December 31, 2024, you would deduct the accumulated depreciation (total depreciation up to 2024) from the cost of the asset:
Book Value = Asset Cost - Accumulated Depreciation
Assuming no depreciation was taken before 2024, the book value on December 31, 2024, would be:
Book Value = $10,000 - ($1,600 x 1 year) = $8,400
Therefore, the book value on December 31, 2024, would be $8,400.