Lesson 8: Depreciation schedules with SLN and DDB

Practice exercises for accountants, checked instantly in your browser.

Straight-line depreciation spreads cost minus salvage value evenly: =SLN(cost, salvage, life) is the same as (cost − salvage) / life. Double-declining balance front-loads the expense: =DDB(cost, salvage, life, period) returns the expense for one period and never depreciates below salvage.

A schedule then needs accumulated depreciation, a running total with the start of the range locked (=SUM($E$2:E2)), and book value, which is cost minus accumulated depreciation.

Worked example: =SLN(10000,1000,3)
(10,000 − 1,000) / 3 = 3,000 a year.

Exercises

Exercise 1

Riverbend Courier bought a delivery van (cost B1, salvage B2, life B3). In B4, calculate the annual straight-line depreciation.

Exercise 2

In E2, return the double-declining-balance expense for the year in D2, then fill to E6.

Exercise 3

In F2, calculate accumulated depreciation (the running total of column E) and fill to F6.

Exercise 4

In G2, calculate book value (cost minus accumulated depreciation) and fill to G6.