Sullivan Ranch Corporation has purchased a new tractor. The following information is given: $150,000 $10,000 Cost: Estimated Residual: Estimated Life in years: Estimated Life in hours: Actual Hours: Year 1 Year 2 Year 3 Year 4 4 1200 360 270 350 220 Required: 1. Prepare the following Straight-Line depreciation schedule by using the Excel SLN function to calculate Depreciation. Expense and entering formulas for the remaining cells. Use absolute cell references when appropriate. (Use cells A4 to B12 from the given information to complete this question.) Year 1 2 3 4 Total SULLIVAN RANCH CORPORATION Depreciation Schedule-Straight-Line Method End of year amounts Depreciatio Depreciatio n Expense n Book Value
Depreciation Methods
The word "depreciation" is defined as an accounting method wherein the cost of tangible assets is spread over its useful life and it usually denotes how much of the assets value has been used up. The depreciation is usually considered as an operating expense. The main reason behind depreciation includes wear and tear of the assets, obsolescence etc.
Depreciation Accounting
In terms of accounting, with the passage of time the value of a fixed asset (like machinery, plants, furniture etc.) goes down over a specific period of time is known as depreciation. Now, the question comes in your mind, why the value of the fixed asset reduces over time.


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