The example takes advantage of absolute references

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Unformatted text preview: ch methodology has its own worksheet for value calculations which looks to the “Input” worksheet. However, the “Units of Activity” worksheet has an input area where you can put monthly or annual activities in and get the proper results. This makes the discussion comparable since, if you input values on the “Input” worksheet, all the methods will portray values based on the same inputs in their own methodology. There are some assumptions imposed on these sheets. There are no asset that have a life greater than 40 years and the units of activities will be fully depreciated through the number of activities within 40 years of acquisition. Straight-Line Depreciation The straight-line depreciation concept is handled through the “SLN” formula of Excel. The formula is “=SLN(cost, salvage value, life).” Since each period’s depreciation is the same value, this is a simple formula for Excel. This formula is shown in use on the Straight-Line worksheet of the “Depreciation” data file. In the “Depreciation” data file the “Straight-Line” worksheet receives its inputs from the “Input” worksheet. The example takes advantage of absolute references and embedded formulas to generate the period expense per month for the life of the asset, the accumulated depreciation to date, and the book value of the asset at the end of each period. The straight-line depreciation formula of Excel is found under the financial category and requires asset cost, asset salvage value, and life. Remember that Excel will not Chapter 14, Page 89 accept commas or dollar signs within formulas. The formulas in the “Depreciation” data file utilize “Look To” and “Absolute References” extensively. The life must be in the same factor or terms that you wish to record the depreciation in. If you record depreciation monthly, state the life in months, if you record depreciation quarterly, state the life in quarters, if you record depreciation annually, state the life in years. For an asset with a cost of $2,4...
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