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Basic Instructions on How to Create a Straight Line Depreciation Schedule
1 Love Thy Pet Inc.,
2 Depreciation Schedule - Straight Line
3 For 5 years Asset
4 Cost of Asset 20,000
5 Residual Value 5,000
6 Useful Life 5 years
E
C D Book value at end
A B Depreciation Accumulated of year (Cost -
End of Cost of expense for depreciation at Accumulated
7 year Asset year end of year depreciation)
8 1 $20,000 $3,000 $3,000 $17,000
9 2 $20,000 $3,000 $6,000 $14,000
10 3 $20,000 $3,000 $9,000 $11,000
11 4 $20,000 $3,000 $12,000 $8,000
12 5 $20,000 $3,000 $15,000 $5,000
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Step-by-Step Instructions
Always start with the name of the company, the title of the statement, and the period for
which the statement is being prepared.
Step 1. On line 4 place the title “Cost of Asset” and the amount of the asset when purchased.
Step 2. On line 5 place the title “Residual Value” and the amount of the residual value or the
value of the asset once it has ended it useful life to the company.
Step 3.On line 6 place the title “Useful life” and the number of year the asset will be useful to
the company.
Step 4.On line 7 place the titles:
End of Cost of Depreciation Accumulated Book value at end
Year Asset expense for depreciation at of year (Cost –
Year end of year Accumulated
Depreciation)
Step 5. On line 8 column A through line 12 column A place the years the asset will be used or
number the lines for the beginning to the end of the assets number of years of useful life.
Step 6. On line 8 column B through line 12 column B place the cost of the asset.
Step 7. On line 8 column C through line 12 column C place the annual depreciation.
The amount is calculated by the following formula:
Cost of asset – Residual Value
Useful life
20,000 – 5,000
5
= 3,000
Step 8. On line 8 column D through line 12 column D place the accumulated depreciation.
Use the following formulas to calculate the amounts:
D8 is equal to C8.
D9 is equal to D8 plus C9.
D10 is equal to D9 plus C10.
D11 is equal to D10 plus C11
D12 is equal to D11 plus C12.
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Step 9. On line 8 column E through line 12 column E place the Book value of the asset.
Use the following formulas to calculate the amounts:
E8 is equal to the cost of the asset (line 4) minus the Accumulated depreciation on line D8.
E9 is equal to the cost of the asset (line 4) minus the Accumulated depreciation on line D9.
E10 is equal to the cost of the asset (line 4) minus the Accumulated depreciation on line D10.
E11 is equal to the cost of the asset (line 4) minus the Accumulated depreciation on line D11.
E12 is equal to the cost of the asset (line 4) minus the Accumulated depreciation on line D12.
Note: The number on line 12 column E should be the same as the residual value (line 5).
The number on line 12 column D should be the same as the cost of the asset minus
the residual value (depreciable cost).
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