https://file.aiquickdraw.com/mathbot/file/1726465094467jef0l88n.jpg

The image provides an illustration of a depreciation scenario using the **Straight Line Method (SLM)**. Let's break it down step by step:

### Original Depreciation Calculation:
1. **Cost**: Rs 1,00,000 (the cost of the computer).
2. **Salvage Value**: Rs 10,000 (initially estimated).
3. **Depreciable Amount**: Rs 90,000 (Cost - Salvage Value = 1,00,000 - 10,000).
4. **Depreciation for Year 1**: Rs 18,000 (calculated as the depreciable amount divided by the useful life of 5 years: 90,000 ÷ 5 = 18,000).
5. **Depreciation for Year 2**: Rs 18,000 (same as Year 1 since it's straight-line depreciation).
6. **Accumulated Depreciation** after 2 years: Rs 36,000 (18,000 + 18,000).
7. **Carrying Amount** (book value after Year 2): Rs 64,000 (Cost - Accumulated Depreciation = 1,00,000 - 36,000).

### Revised Depreciation Calculation (after Year 2):
8. **Revised Salvage Value**: Rs 4,000 (new estimate).
9. **Revised Useful Life**: 6 years (increased from 5 years).
10. **Remaining Useful Life**: 4 years (as 2 years have already passed).
11. **Depreciable Amount after Revision**: Rs 60,000 (Carrying Amount - Revised Salvage Value = 64,000 - 4,000).
12. **Depreciation Amount per Year (for the remaining 4 years)**: Rs 15,000 (Depreciable Amount ÷ Remaining Useful Life = 60,000 ÷ 4).

Would you like further details or clarification on any specific step?

Here are 5 related questions to expand your understanding:
1. How is depreciation calculated using other methods like the declining balance method?
2. What are the key differences between useful life and salvage value?
3. How would the carrying amount change if the salvage value was further revised in the future?
4. Can you apply this method to an asset with a varying rate of depreciation each year?
5. How does accumulated depreciation impact a company’s balance sheet?

**Tip:** Always reassess useful life and salvage value periodically to ensure the most accurate depreciation calculations.

In illustration → Computer Cost = Rs 100,000, Salvage value = Rs 10,000, Useful life = 5 years. After Year 2, the useful life is revised to 6 years and the salvage value to Rs 4,000. Perform depreciation calculations using the Straight Line Method (SLM).

Understand how to calculate straight-line depreciation for a computer costing Rs 100,000 with an initial useful life of 5 years, later revised to 6 years. The salvage value is updated from Rs 10,000 to Rs 4,000 after 2 years. Learn step-by-step calculations including accumulated depreciation and carrying amount.

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