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Details
MakeUnited
ModelUS 70
Year2015
Engine Type2 Stroke
Engine Capacity70cc
KM's driven3,000
Ignition typeKickstarter
OriginLocal
ConditionUsed
Registration CityGujranwala
Description
Depreciation Expense = (Cost of the Bike - Salvage Value) / Useful Life
Steps to Calculate Depreciation:
1. Determine the Initial Cost: Find out the original purchase price of the bike.
2. Estimate the Salvage Value: This is the estimated value of the bike at the end of its useful life (often a small percentage of the initial cost).
3. Determine the Useful Life: Bikes typically have a useful life of around 5 to 10 years, depending on usage and maintenance.
Example Calculation:
Assuming:
Initial Cost: $500
Salvage Value: $50
Useful Life: 10 years
1. Depreciation Expense:
\text{Depreciation Expense} = \frac{500 - 50}{10} = \frac{450}{10} = 45 \text{ per year}
2. Total Depreciation Over 9 Years (2015 to 2024):
\text{Total Depreciation} = 9 \times 45 = 405
3. Current Value:
\text{Current Value} = \text{Initial Cost} - \text{Total Depreciation} = 500 - 405 = 95
In this example, the estimated current value of the bike would be approximately $95.
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