# HP 20b Depreciation Straight-Line Method

A metalworking machine, purchased for \$10,000.00, is to be depreciated over five years. Its salvage value is estimated at \$500.00. Using the straight-line method, find the depreciation and remaining depreciable value for each of the first two years of the machine’s life.

Press [Shift] [Depn] keys to open the Depreciation menu starting with the “SLine” straight line method.

Press [Down Arrow] key the prompt displays “Life” or the current value of the useful life. 1 is the default value.  Enter value of 5 and press [INPUT] key to enter the current value for the useful life of five years.

Press [Down Arrow] key the prompt now display “Start” the current value of Start=. 1 where 1 is the default value.  For this example, you should leave it as the default value.

Press [Down Arrow] key to move the next prompt, which is “Cost.  To overwrite the current value, enter the value 10000 and then press [INPUT].  This would be the purchased for \$10,000.00 for the machine.

Press [Down Arrow] key the prompt now display “Salvage”.  Enter 500 and press [INPUT] to update the estimate salvage value of  \$500.00.

Next, the HP20b would give us the solution:

Press [Down Arrow] again, it would display the first year “R.Book Value” amount of 8,100.00 which represents \$8,100.00 Press [Down Arrow] it displays the current year of the depreciation. 1 is the default value for the first year.  Press [Down Arrow] again, it would display the first year “Depreciation” amount of 1,900.00 the book value of the equipment after year 1.  Press [Down Arrow] one more time, it show “R.Depreciable” amount of 7,600 or \$7,600 for the remaining depreciable value after year 1.

Press [Down Arrow] it will show the 2nd “Year”.  Repeat the above steps to obtain the Year 2 computed data.