Practice Straight Line Method (SLM) - 18.5.1 | 18. Depreciation Accounting | Management 1 (Organizational Behaviour/Finance & Accounting)
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Knowledge

18.5.1 - Straight Line Method (SLM)

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Learning

Practice Questions

Test your understanding with targeted questions related to the topic.

Question 1

Easy

Calculate the annual depreciation for an asset costing $12,000 with a residual value of $2,000 and a useful life of 10 years.

💡 Hint: Use the SLM formula: (Cost - Residual) / Useful Life.

Question 2

Easy

If an asset's cost is $15,000 and it has a residual value of $1,500 over a useful life of 5 years, what is its annual depreciation?

💡 Hint: Remember the formula!

Practice 4 more questions and get performance evaluation

Interactive Quizzes

Engage in quick quizzes to reinforce what you've learned and check your comprehension.

Question 1

What does the Straight Line Method calculate?

  • Total value of an asset
  • Annual depreciation
  • Cash flow from an asset

💡 Hint: Think about how we spread costs each year.

Question 2

True or False: The residual value contributes positively to the depreciation calculation in SLM.

  • True
  • False

💡 Hint: Remember how we derive the annual depreciation.

Solve and get performance evaluation

Challenge Problems

Push your limits with challenges.

Question 1

A business acquires a vehicle for $40,000. It estimates the vehicle will have a residual value of $4,000 after 8 years. Calculate the annual depreciation using SLM. Now, what implications does this have if the vehicle is primarily used for long-distance transportation?

💡 Hint: Use the SLM formula.

Question 2

If a company updates its asset schedule to include additional years or a higher residual value for an asset, how would that affect the SLM calculation for depreciation? Calculate using an original asset cost of $60,000, with a new estimated residual value of $6,000 over a useful life of 12 years instead of 10.

💡 Hint: Re-evaluate the values and apply the SLM formula.

Challenge and get performance evaluation