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Depreciation Calculator Guide

This document discusses depreciation methods and how to calculate them using calculator tricks. It defines depreciation as the decrease in value of an asset over time. It then provides the formulas and steps to calculate depreciation using the straight line method, sinking fund method, declining balance method, double declining balance method, and sum-of-years' digits method. An example problem is presented and solved for each method. The book values after 2 years are reported for each method and compared.

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153 views3 pages

Depreciation Calculator Guide

This document discusses depreciation methods and how to calculate them using calculator tricks. It defines depreciation as the decrease in value of an asset over time. It then provides the formulas and steps to calculate depreciation using the straight line method, sinking fund method, declining balance method, double declining balance method, and sum-of-years' digits method. An example problem is presented and solved for each method. The book values after 2 years are reported for each method and compared.

Uploaded by

Geodetic Engineering Files
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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ENGINEERING ECONOMICS: DEPRECIATION WITH

CALCULATOR TRICKS
N. Tabanao
Email:heartfiglia143@gmail.com
May 2018

Calculators Used:
Casio Fx-115 ES PLUS
Casio Fx-570 ES PLUS
Casio Fx-991 ES PLUS

Depreciation
Depreciation is the decrease in the value of an asset due passage of
time.

Elements:
 FC = 1st cost
 SV = salvage value
 d = depreciation charge
 n = economic life of the property
 m = any time before n
 BVm = book value after m years
 Dm = total depreciation for m years

Methods of Computing Depreciation Calculator Trick


Straight Line Method Y  A  BX MODE 3 2
FC  SV FC  SV
d  n 1 ; D m  d ( F / A, i, m)
Sinking Fund Method ( F / A, i, n)
 ((1  i) )
0
x

Declining Balance Method Y  A  B ^ x MODE 3 6


Double Declining Balance Method Y  A  B ^ x MODE 3 6
Sum-of-Year’s Digits Method Y  _  cX 2 MODE 3 3

Problem presented is made up.

 Straight Line Method


An engineer’s transit has a first cost of PhP 500,000 life of 4 years and
a salvage value of PhP 130,000. What is the book value of the
equipment after 2 years using straight line method?

MODE 3 2 Y  A  BX
X Y
0 500,000
4 130,000
AC

2 y = PhP 315,000

 Sinking Fund Method


Same problem. Book value after 2 years using sinking fund method?
Assume interest at 5% compounded annually.

n  4 yrs ; m  2 yrs
FC  SV FC  SV 500000  130000
d  n 1  41  A (Store to A)
( F / A, i, n)
0
 ((1  i) )  ((1  5%) )
x

0
x

2 1
Dm  d ( F / A, i, m)  A ((1  5%) x )  ( B Store to B)
0

Book value after 2 years = 500,000-B = PhP 324,019

 Declining Balance Method


Same problem. Book value after 2 years using declining balance
method?

MODE 3 6 Y  A  B ^ x

X Y
0 500,000
4 130,000
AC

2 y = PhP 254,951

 Double Declining Balance Method


Same problem. Book value after 2 years using double declining
balance method?

MODE 3 6 Y  A  B ^ x

X Y
0 500,000
4 2
500000(1  ) 4
4

AC

2 y = PhP 125,000
 Sum-of-Year’s Digits Method
Same problem. Book value after 2 years using Sum-of-Year’s Digits
Method?

MODE 3 3 Y  _  cX 2

X Y
0 500,000
4 130,000
5 130,000
AC

2 y = PhP 241,000

Comparison of the answers.

Straight Line Method PhP 315,000


Sinking Fund Method PhP 324,019
Declining Balance Method PhP 254,951
Double Declining Balance Method PhP 125,000
Sum-of-Year’s Digits Method PhP 241,000

I will appreciate any suggestion and will welcome any errors


pointed out.

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