Answer to Question #261205 in Algorithms for She

Question

1.       The straight-line method for computing the yearly depreciation in value D for an item is given by the formula 

        D = P – S

                  Y 

Answer 1

The straight line method for computing the yearly depreciation in value D for the item is given by the following formula D = (P-S)/Y where the variables P = purchase price S = salvage value Y = number of years item is used D = yearly depreciation.

Straight line depreciation is a common method of depreciation where the value of a fixed asset is reduced over its useful life.

It's used to reduce the carrying amount of a fixed asset over its useful life. With straight line depreciation, an asset's cost is depreciated the same amount for each accounting period. You can then depreciate key assets on your tax income statement or business balance sheet.