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The depreciable amount of a xed asset that is, cost minus scrap value may be written off in different ways. The amount may be spread evenly over the years, as in the straight-line method, or it may be accel erated. Two accelerated methods are the double-declining balance and the sum-of-the-years -digits method. These methods provide for larger amounts of depreciation in the earlier years. Repairs, on the other hand, are generally lower in earlier years, so the total cost of depreciation and repairs should be about the same each year. The units-of-production method bases depreciation each period on the amount of output. Straight-Line (SL) The straight-line method is the simplest and most widely used deprecia tion method. Under this method, an equal portion of the cost of the asset is allocated to each period of use. The periodic charge is expressed as: Cost scrap value Useful life (in years) For example, if the cost of a machine is $17,000, its scrap value is $2,000 and its estimated useful life is 5 years, depreciation can be calcu lated as follows: = Annual Depreciation Charge



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A central angle is measured by its intercepted arc. An inscribed angle is measured by one-half its intercepted arc.

PRINCIPLE 2:

Fig. 6-31

PRINCIPLE 4:

In the same or congruent circles, inscribed angles having congruent intercepted arcs are congruent. (This is the converse of Principle 3.)

PRINCIPLE 5:

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Fig. 6-32

CHAPTER 15: Property, Plant, and Equipment: Depreciation $17,000 $2,000

Fig. 6-33

PRINCIPLE 7:

Fig. 6-34

Fig. 6-35





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An angle formed by a tangent and a chord is measured by one-half its intercepted arc. An angle formed by two intersecting chords is measured by one-half the sum of the intercepted arcs. An angle formed by two secants intersecting outside a circle is measured by one-half the difference of the intercepted arcs. An angle formed by a tangent and a secant intersecting outside a circle is measured by onehalf the difference of the intercepted arcs. An angle formed by two tangents intersecting outside a circle is measured by one-half the difference of the intercepted arcs.

PRINCIPLE 10: PRINCIPLE 11: PRINCIPLE 12: PRINCIPLE 13:

The entry to record the depreciation would be: Depreciation Expense, Machinery 3,000 Accumulated Depreciation, Machinery 3,000 = $3,000 per year

Fig. 6-36

Note: To find the angle formed by a secant and a chord meeting on the circle, first find the measure of the inscribed angle adjacent to it and then subtract from 180 . Thus if secant AB meets chord CD at C on the circle in Fig. 6-36, to find mj y, first find the measure of inscribed j x. Obtain mj y by subtracting mj x from 180 .

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6.10 Applying principles 1 and 2 (a) In Fig. 6-37(a), if mj y (b) In Fig. 6-37(b), if mj y (c) In Fig. 6-37(c), if mj x 46 , find mj x. 112 , find mj x. 75 , find m y .

Fig. 6-37

(46 )

150 60

6.11 Applying principles 3 to 8 Find x and y in each part of Fig. 6-38.

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