1. © 2014 Cengage Learning. All Rights Reserved.
Learning Objectives
LO4 Calculate depreciation expense.
LO5 Calculate depreciation for a partial year.
LO6 Calculate accumulated depreciation and book value.
© 2014 Cengage Learning. All Rights Reserved.

2. Calculating Straight-Line Depreciation
Lesson 19-2
Calculating Straight-Line Depreciation
LO4
Original Cost −
Estimated Salvage Value =
Estimated Total Depreciation Expense
$8,500.00 −
$500.00 =
$8,000.00
Estimated Total Depreciation Expense ÷
Years of Estimated Useful Life =
Annual Depreciation Expense
$8,000.00 ÷ 4 =
$2,000.00

3. Calculating Depreciation Expense for Part of a Year
Lesson 19-2
Calculating Depreciation Expense for Part of a Year
LO5
Annual Depreciation Expense ÷
Months in Year =
Monthly Depreciation Expense
$900.00 ÷ 12 =
$75.00
Monthly Depreciation Expense ×
Number of Months Asset Is Used =
Prior Year’s Depreciation Expense
$75.00 × 4 =
$300.00

4. Calculating Accumulated Depreciation
Lesson 19-2
Calculating Accumulated Depreciation
LO6
20X2 Accumulated Depreciation +
20X3 Depreciation Expense =
20X3 Accumulated Depreciation
$1,200.00 +
$900.00 =
$2,100.00

5. Calculating Book Value
Lesson 19-2
Calculating Book Value
LO6
Original Cost −
Accumulated Depreciation =
Ending Book Value
$3,000.00 −
$2,700.00 =
$300.00

6. Lesson 19-2 Audit Your Understanding
1. Which accounting concept is being applied when depreciation expense is recorded for plant assets?
ANSWER
Matching Expenses with Revenue

7. Lesson 19-2 Audit Your Understanding
2. What three amounts are used to calculate a plant asset’s annual depreciation expense using the straight-line method of depreciation?
ANSWER
Original cost, estimated salvage value, and estimated useful life