Chapter 5, Problem 1DQ

What is a depreciation schedule?

To determine

Explain the depreciation schedule.

Explanation of Solution

The depreciation schedule is a tabular presentation of annual book values and annual depreciation. It enables firms to maintain track of their long-term assets and observe the way these are going to depreciate over time. Typically, the information that depreciation schedule comprises a type of the asset, the date of purchase, assets cost, the estimated life of the asset, and the value of the asset when the firm decides to replace it (salvage value).

Moreover, the depreciation schedule shows information on the method of depreciation, the current year depreciation, the accumulated depreciation from the date the purchase to the date of recording the depreciation expense, and the book value (net).