Accounting – 4.2 Accounting for depreciation and disposal of non-current assets | e-Consult
4.2 Accounting for depreciation and disposal of non-current assets (1 questions)
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Straight-line depreciation allocates an equal amount of depreciation expense each year. The formula is:
Annual Depreciation = (Cost - Residual Value) / Useful Life
In this case:
Annual Depreciation = (£20,000 - £2,000) / 5 = £3,600
Therefore, the annual depreciation expense for the first three years is £3,600 per year.
| Year | Depreciation Expense |
Year 1: £3,600
Year 2: £3,600
Year 3: £3,600