Unformatted text preview: eciation then it determines period depreciation and precludes the violation of
salvage value. When utilizing this worksheet you can put in period activity to determine period
depreciation. The option of entering annual data and having Excel divide that value into 12 evenly valued
units for monthly data entry is provided. A monthly input matrix is also provided. Then the worksheet
subtracts accumulated depreciation from cost to get book value.
This worksheet does not utilize the concept of “If” statements referencing the life or period column
since they are not relevant to units of activity depreciation. Chapter 15 LOANS AND THE TIME VALUE OF
MONEY
Chapter Outline
Cash Flow Within Formulas
Loan Payments
Payment To Principle
Cumulative Payment To Principle
Interest Payment Cumulative Payment To Interest
Present Value
Future Value
Bond Table Cash Flow Within Formulas
There are many formulas within Excel, particularly those regarding the payment of notes payable –
“PMT”, notes payable interest payments – “IPMT”, and notes payable principle payment – “PPMT” that
are sensitive to cash flow issues. For example, the formula to calculate the payment for a notes payable
issue would be “=PMT(interest rate for the compounding period, the life of the note payable in the same
periodicity as the interest rate, the principle amount, the future value or balloon payment, and whether the
payment is made at the end of the interest period – 0, or at the beginning of the interest period – 1. In cell
D19 on the Basic Formulas tab of the Basic Data and Formulas workbook the formula is written as
=PMT(C14/12,C15*12,C16,C17,C18). In this formula the formula “looks to” cell C14 and divides the
value that it finds there by 12 to get the monthly interest rate, it looks at cell C15 to get the life of the note
payable in years and multiplies it by 12 to get the life in months – IMPORTANT: The interest rate must
be in the same periodicity as the life of the note payable as shown here – months. It may...
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 Fall '10
 Ullmann
 Accounting, Depreciation

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