answersLogoWhite

0


Best Answer

True

User Avatar

Wiki User

11y ago
This answer is:
User Avatar

Add your answer:

Earn +20 pts
Q: Is depreciation expense an estimate that is based on predictions of the asset's salvage value and useful life?
Write your answer...
Submit
Still have questions?
magnify glass
imp
Related questions

You purchased a delivery van for 23000 with a salvage value of 3000 on sept 1 It has a useful life of 5 yrs using the straight-line method how much depreciation expense should be in Dec?

The annual depreciation expense for the delivery van would be calculated as (Cost - Salvage Value) / Useful Life. In this case, the annual depreciation expense would be (23000 - 3000) / 5 = 4000. For December, you would have incurred 4/12 of the annual depreciation expense, which equals 1333.33.


How do you calculate depreciation using Written Down Value Method?

To calculate depreciation using the Written Down Value method, you start with the initial cost of the asset, subtract the accumulated depreciation from previous periods, then apply the depreciation rate to the remaining value. The formula is: Depreciation expense = (Beginning book value - Salvage value) x Depreciation rate. This method allows for higher depreciation expenses in the early years of an asset's life.


Is depreciation on balance sheet or income statement?

Depreciation on the income statement is the amount of depreciation expense that is appropriate for the period of time indicated in the heading of the income statement. The depreciation reported on the balance sheet is the accumulated or the cumulative total amount of depreciation that has been reported as expense on the income statement from the time the assets were acquired until the date of the balance sheet.Let’s illustrate the difference with an example. A company has only one depreciable asset that was acquired three years ago at a cost of $120,000. The asset is expected to have a useful life of 10 years and no salvage value. The company uses straight-line depreciation on its monthly financial statements. In the asset’s 36th month of service, the monthly income statement will report depreciation expense of $1,000. On the balance sheet dated as of the last day of the 36th month, accumulated depreciation will be reported as $36,000. In the 37th month, the income statement will report $1,000 of depreciation expense. At the end of the 37th month, the balance sheet will report accumulated depreciation of $37,000.


How can you calculate a motorcycle's depreciation value?

Formula for calculating depreciation value Annual depreciation value = (Total cost - salvage value (if any) ) / useful life


Formula for calculating straight line depreciation?

Formula for straight line depreciation is as follows: Depreciation = (Cost of asset - salvage value) / useful life of asset


Which is the first year depreciation deduction on a machine with a three-year- useful life which costs 5000 and has no salvage value?

Answer:The depreciation expense depends on the depreciation method, the cost, the residual value and the economic lifetime. Common depreciation methods include: straight line method, accelerated deprecation methods (including the double declining balance method), sum of digits method and production method. Straight line methodAssuming you are using the straight line method, the depreciation expense in the first year is: cost - residual value, divided by the economic lifetime= (5000 - 0) / 3 = 1666.67


How do you calculate straigt line depreciation?

Straigt line depreciation = (total cost of asset - salvage value)/ useful life of asset.


What is the formula for a straight line depreciation method?

The formula for a straight line depreciation method is the Cost minus the Salvage Value over the Life in Number of Periods which will equal Depreciation.


A company purchased an asset for 170000 with a salvage value of 8500 have a useful life of 4 years Find the depreciation epense for the first year using the 150 percent declining balance method?

Annual depreciation is as follows: Annual depreciation = (actual cost - salvage value ) / useful life of asset annual depreciation = 170000 - 8500 / 4 = 40375 Annual depreciation with 150 percentage decline method = 40375 * 1.5 = 60563


Difference between scrap value and salvage value?

Salvage value is defined as the value of the product after its useful life .In other words it is the value after depreciation. Salvage value also known as scrap value.


What is srtaight line method?

Straight line method of depreciation is that under which any asset is depreciated in equal amount for every year till salvage value. Formula for straight line method: Depreciation = (Cost price - Salvage Value)/Number of years


What is MODIFIED straight line method for calculating depreciation?

The modified straight-line method for calculating depreciation is a variation of the straight-line method where the depreciation expense is accelerated in the early years and then slows down in the later years. This method takes into account the salvage value of the asset and spreads the depreciation expense more evenly over the useful life of the asset. It is often used when the asset's cost declines more rapidly in the early years of its useful life.