Under the Sum-of-the-Years'-Digits Method, how is the depreciation expense calcu

Under the Sum-of-the-Years'-Digits Method, how is the depreciation expense calculated?

Under the Sum-of-the-Years'-Digits Method, how is the depreciation expense calculated?

Step 1: Identify the cost of the asset. This is the amount you paid to acquire it.
Step 2: Determine the salvage value. This is the estimated value of the asset at the end of its useful life.
Step 3: Calculate the total useful life of the asset in years.
Step 4: Calculate the sum of the years. For example, if the asset has a useful life of 5 years, the sum of the years is 1 + 2 + 3 + 4 + 5 = 15.
Step 5: Determine the remaining life of the asset. This is how many years are left until the asset is fully depreciated.
Step 6: Use the formula: Depreciation Expense = (Cost - Salvage Value) x (Remaining Life / Sum of Years).
Step 7: Plug in the values you have into the formula to calculate the depreciation expense for the current year.

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