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.

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