Depreciating A Car
The item that I intend to own is a car. Owning a car will be capital expenditure as it will last for a long period of time and the amount spend on the car will be significant. Since the car that I intend to own will be for personal use, I think that using straight line method to depreciate the car would be the best way.
For example, I bought a car for personal use and the car costs $120,000. It has a useful life of 10 years, to calculate depreciation of the car, I should use the cost divided by its useful life, which is $120,000 / 10 years equals to $12,000, the cost of depreciation for each year will be the same when using straight line method.
However, there may be scrap value for the car. Scrap value is the worth of physical asset’s individual
For example, I bought a car for personal use and the car costs $120,000. It has a useful life of 10 years, to calculate depreciation of the car, I should use the cost divided by its useful life, which is $120,000 / 10 years equals to $12,000, the cost of depreciation for each year will be the same when using straight line method.
However, there may be scrap value for the car. Scrap value is the worth of physical asset’s individual