18.5.1 - Straight Line Method (SLM)
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Practice Questions
Test your understanding with targeted questions
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.
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!
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Interactive Quizzes
Quick quizzes to reinforce your learning
What does the Straight Line Method calculate?
💡 Hint: Think about how we spread costs each year.
True or False: The residual value contributes positively to the depreciation calculation in SLM.
💡 Hint: Remember how we derive the annual depreciation.
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Challenge Problems
Push your limits with advanced challenges
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.
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.
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