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On March 1, 2022, Jefferson Consulting purchased new computers for $12,840. The computers are expected to last 3 years and will have an estimated residual value of $600. Jefferson Consulting has a December 31 year end.

Required

Prepare the table below showing the yearly depreciation, accumulated depreciation, and net book value of the equipment.

Do not enter dollar signs or commas in the input boxes.

Round your answers to the nearest whole number.

Year	Original Cost of Computers	Depreciation Expense	Accumulated Depreciation	Net Book Value
2022	Answer 1 Question 2
12840
Answer 2 Question 2
4080
Answer 3 Question 2
Answer 4 Question 2
2023	Answer 5 Question 2
12840
Answer 6 Question 2
Answer 7 Question 2
Answer 8 Question 2
2024	Answer 9 Question 2
12840
Answer 10 Question 2
Answer 11 Question 2
Answer 12 Question 2
2025	Answer 13 Question 2
12840
Answer 14 Question 2
Answer 15 Question 2
Answer 16 Question 2
600


To calculate the depreciation, accumulated depreciation, and net book value of the computers, we can use the **straight-line depreciation method**. This method assumes that the depreciation expense is evenly spread out over the useful life of the asset.

### Straight-Line Depreciation Formula:

\[
\text{Depreciation Expense per Year} = \frac{\text{Original Cost} - \text{Residual Value}}{\text{Useful Life (years)}}
\]

**Given:**
- Original cost of the computers: $12,840
- Residual value: $600
- Useful life: 3 years
- Purchase date: March 1, 2022
- Year-end: December 31

### Step 1: Calculate Yearly Depreciation Expense

\[
\text{Depreciation Expense per Year} = \frac{12,840 - 600}{3} = \frac{12,240}{3} = 4,080
\]

This means that the yearly depreciation expense is $4,080. However, since the computers were purchased on March 1, 2022, the depreciation for the first year (2022) will be prorated based on 10 months of use out of 12 months.

\[
\text{Depreciation Expense for 2022} = 4,080 \times \frac{10}{12} = 3,400
\]

### Step 2: Fill Out the Table

We can now fill out the table year by year, calculating the accumulated depreciation and the net book value.

| Year | Original Cost of Computers | Depreciation Expense | Accumulated Depreciation | Net Book Value |
|------|----------------------------|----------------------|--------------------------|----------------|
| 2022 | 12,840                     | 3,400                | 3,400                    | 9,440          |
| 2023 | 12,840                     | 4,080                | 7,480                    | 5,360          |
| 2024 | 12,840                     | 4,080                | 11,560                   | 1,280          |
| 2025 | 12,840                     | 680                  | 12,240                   | 600            |

### Explanation:
- **Depreciation Expense for 2022** is prorated for 10 months of use.
- **Depreciation Expense for 2023 and 2024** is the full $4,080.
- **Depreciation Expense for 2025** is $680, which is the remaining balance that brings the net book value down to the residual value of $600.
- **Accumulated Depreciation** adds up each year.
- **Net Book Value** is calculated as the original cost minus the accumulated depreciation.

Do you want details on any of these calculations? If so, feel free to ask!

### 5 Relative Questions:
1. What other methods of depreciation can be used besides straight-line?
2. Why is the residual value important in depreciation calculations?
3. How would the calculation change if the computers were sold before the end of their useful life?
4. How does accumulated depreciation affect financial statements?
5. What is the difference between book value and market value?

**Tip:** Always remember to prorate depreciation for partial-year asset purchases!

On March 1, 2022, Jefferson Consulting purchased new computers for $12,840. The computers are expected to last 3 years and will have an estimated residual value of $600. Jefferson Consulting has a December 31 year end.

Required: Prepare the table below showing the yearly depreciation, accumulated depreciation, and net book value of the equipment.

Do not enter dollar signs or commas in the input boxes.
Round your answers to the nearest whole number.

Learn how to calculate the yearly depreciation, accumulated depreciation, and net book value of computers purchased by Jefferson Consulting using the straight-line method. This example involves prorated depreciation for the first year and demonstrates the calculation over a 3-year useful life with a residual value. Suitable for students in Grades 11-12.

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