Formula: Subtract, Divide; Cell Referencing

Using Excel to Compute Revised Depreciation

PROBLEM

On January $1,2022,$ the Hermann Company general ledger shows the following information concerning its equipment.

Equipment

$$36,000$

$13,600$

The depreciation resulted from using the straight$-$line method with the following additional information.

Useful life

Salvage value

$10$

$ $2,000$

On January $1,2022,$ the company concludes that the remaining useful life changes to the following with the same salvage value.

Remaining useful life

Compute the revised annual depreciation.

Student Work Area

Required: Provide input into cells shaded in yellow in this template. Use mathematical formulas with cell references to the Problem and work areas as indicated.

Book value at date of change

Depreciable cost

Revised annual depreciation