Grade 12 Math: Understanding Depreciation

This worksheet helps Grade 12 students understand depreciation, including different methods of calculation and their impact on asset value.

Grade 12 Math Financial LiteracyDepreciation

Use This Worksheet

Includes

3 Short AnswerMultiple ChoiceFill in the BlanksTrue / FalseLong Answer

Standards

CCSS.MATH.CONTENT.HSF.LE.A.1CCSS.MATH.CONTENT.HSF.LE.A.2CCSS.MATH.CONTENT.HSA.CED.A.1

Topics

depreciationfinancial literacymathgrade 12

9 sections · Free to use · Printable

← More Math worksheets for Grade 12

Grade 12 Math: Understanding Depreciation

Name:

Date:

Score:

Read each question carefully and provide your answers in the space provided. Show all your work for calculations.

1. Define depreciation in your own words. Why is it important for businesses to account for depreciation?

2. Which depreciation method charges an equal amount of depreciation expense over the asset's useful life?

Declining Balance Method

Straight-Line 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 will 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. The declining balance method of depreciation results in a higher depreciation expense in the later years of an asset's life.

True

False

7. Consider the following graph showing the book value of an asset over its useful life. Based on the curve, which depreciation method was likely used?

8. Discuss how depreciation affects a company's financial statements (income statement and balance sheet) and its tax liability. Provide a brief explanation for each.