Grade 11 Math: Understanding Depreciation
This worksheet helps Grade 11 students understand the concept of depreciation, its different methods, and how to calculate it for various assets.
Includes
Standards
Understanding Depreciation
Name:
Date:
Score:
Read each question carefully and answer to the best of your ability. Show all your work for calculation questions.
1. Which of the following best describes depreciation?
An increase in an asset's value over time.
The process of allocating the cost of a tangible asset over its useful life.
The market value of an asset at the end of its useful life.
The total cost of an asset including maintenance.
2. Which depreciation method results in a higher depreciation expense in the early years of an asset's life?
Straight-line method
Declining balance method
Units of production method
Sum-of-the-years' digits method
3. The original cost of an asset minus its accumulated depreciation is known as its .
4. Salvage value is the estimated an asset is expected to be worth at the end of its useful life.
5. A company purchases a machine for $50,000. It has an estimated useful life of 5 years and a salvage value of $5,000. Calculate the annual depreciation expense using the straight-line method.
6. Explain two reasons why businesses depreciate their assets.
7. Depreciation only applies to tangible assets, not intangible assets.
True
False
8. The book value of an asset can never be less than its salvage value.
True
False
9. A delivery truck was purchased for $60,000. It has an estimated useful life of 4 years and a salvage value of $10,000. Using the straight-line method, complete the depreciation schedule below for each year.
Year | Beginning Book Value | Depreciation Expense | Accumulated Depreciation | Ending Book Value
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
1 | | | |
2 | | | |
3 | | | |
4 | | | |