The depreciation was calculated based on the difference in the "Accumulated Depreciation" between the years 2011 and 2012. Here’s the step-by-step reasoning:

### Step 1: Identify Accumulated Depreciation
From the image:

- **Accumulated Depreciation for 2012**: $30,371$
- **Accumulated Depreciation for 2011**: $27,070$

### Step 2: Calculate Depreciation Expense
Depreciation expense for a given year is the amount by which the accumulated depreciation increases from the previous year to the current year. So:

\[
\text{Depreciation Expense for 2012} = \text{Accumulated Depreciation in 2012} - \text{Accumulated Depreciation in 2011}
\]

\[
\text{Depreciation Expense for 2012} = 30,371 - 27,070 = 3,301
\]

This means the company recorded a depreciation expense of $3,301 in 2012.

### Why This Method?
Accumulated depreciation represents the total depreciation of an asset since it was put into use. The difference between the accumulated depreciation of two consecutive years gives the depreciation expense for the intervening year.

If you have any further questions or want more details, feel free to ask!

### Related Questions:
1. What are other ways to determine depreciation expense if accumulated depreciation is not provided?
2. How does depreciation affect the income statement and balance sheet?
3. What is the impact of different depreciation methods (e.g., straight-line vs. declining balance) on financial statements?
4. How does accumulated depreciation relate to the net book value of assets?
5. Why might a company choose a particular depreciation method over another?

**Tip**: Depreciation is a non-cash expense, meaning it reduces taxable income without affecting the company's cash flow, making it crucial in Free Cash Flow calculations.

Explore how depreciation is calculated with a step-by-step guide. Learn the method of determining depreciation expenses using accumulated depreciation data from consecutive years. Suitable for financial accounting students and professionals.

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