Depreciation Time Machine

Level 1 of 10 · Compare depreciation methods and their effect on expense and carrying amount.

Year one, straight-line

Courier van · cost $10,000 · residual $2,000 · useful life 4 years · diminishing-balance rate 30%.

What is the straight-line depreciation expense in year 1?

Straight-line

Year	Expense	Accumulated	Carrying
1	?	?	?
2	?	?	?
3	?	?	?
4	?	?	?
5	?	?	?

Diminishing balance (30%)

Year	Expense	Accumulated	Carrying
1	?	?	?
2	?	?	?
3	?	?	?
4	?	?	?
5	?	?	?

Stated accounting model, not tax depreciation. Diminishing balance applies 30% to the opening carrying amount and is capped at the residual value.