HP 12c financial calculator Manuale Utente

 

File name: hp 12c_user's guide_English_HDPMBF12E44 

Page: 138 of 209   

Printered Date: 2005/7/29   

Dimension: 14.8 cm x 21 cm 

 

 If the number of months in the first calendar year is less than 12, the 

amount of depreciation in the 1st year will be less than a full year’s 
depreciation. The actual number of years that depreciation will occur is 
equal to the life +1. For example, a drill has a life of 3 years and is 
purchased 3 months before the year end. The following time diagram shows 
that depreciation will occur over 4 calendar years. 

 

Example 1: A property has just been purchased for $150,000. The purchase 
price is allocated between $25,000 for land and $125,000 for improvements 
(building). The remaining useful life of the building is agreed to be 25 years. There 
is no salvage value forecasted at the end of the useful life of the building. Thus, the 
depreciable value and book value is $125,000. 

The building was acquired 4 months before the end of the year. Using straight-line 
depreciation, find the amount of depreciation and remaining depreciable value for 
the 1st, 2nd, 25th, and 26th years. What is the total depreciation after 3 years? 

fCLEARG   

Salvage value = 0 so FV = 0. 

125000$ 

125,000.00  Book value. 

25n 

Life. 

1\ 

Year desired. 

4t 
 

~ 

First year: 
depreciation, 
remaining depreciable value. 

t 

 

~ 

Second year: 
depreciation, 
remaining depreciable value. 

t 

Third year: 
depreciation. 

~:$:3 
+~- 
gi00 

 
 
Total depreciation through third 
year. 

fCLEARG 

11,666.67   

125000$ 

125,000.00  Book value.