Depreciation Costs?

[sunkissedpr1ncs]

I am currently writing my business plan and I need to enter the depreciation expense. Is there any way to determine this for tanning beds and modular walls?

[Parrot Head]

I would do a straight line depr. for a period of 5 years. After 5 years the equipment isn't worth much.

[sunkissedpr1ncs]

Thanks!...I actually just found out my b/f had a comp. program for it at work so he did them all for me in about a minute...that was easy enough! lol

[Din]

5 years is a little much no? I would do 10years at a 10% drop each year.

[Brian Oshman]

I believe you can only do five years. Machines lose half once uncrated and installed.

[blondjuls]

I did five years on mine, straight line. Easiest in my opinion. Why make it difficult?

Any other equipment we've bought in terms of computers and such we just depreciate the month after they go in use.

[W8INLINE]

so what percentage would you depriciate the equipment each year?

[blondjuls]

OK, say for example you purchase a bed for $15000. And you estimate the salvage value (amount you could sell it for after you have used what you can out of it, this could be zero but in terms of our beds, most of us would sell them) at $3500. You would subtract $3500 from $15000, and take the result and divide by 5. So 11,500/5 = $2300. So thats how much you would depreciate the equipment annually.

[W8INLINE]

Even though I knew that much but thank you anyways. Let me rephrase. How do you come up with the value of $3500 after x amount of years.


P.S. didn't you only have like 400 post a week ago?....wow....you must be prety busy in the den sunshine....

[neon beach]

Once it leaves the sellers warehouse it's worthless.

Or you can consult an accountant.

[maggietan]

$3500-where did you get that #?

[blondjuls]

LOL...You estimate it. Like Brian said, most beds will lose half their value once uncrated and installed (once you drive the car off the lot theory). I mean you can get an idea of what you would sell it for with 5 years of use on it. Its just an estimate.

I pulled those numbers out of my azz. But you get the idea. You figure out about how much it would be worth (book value, if you will) and take that off the cost and divide by number of years you want to depreciate it over.

[blondjuls]

Maggie- Just used random numbers....not significant to anything or any equipment. I was just showing how straightline is calculated.

[blondjuls]

Originally Posted by W8INLINE

P.S. didn't you only have like 400 post a week ago?....wow....you must be prety busy in the den sunshine....

Nah, a week ago? I'm just so darn interesting you don't realize how much you see of me, cause you aren't keeping count! I post maybe 10-20 times a day. The den isn't hella interesting. I mean come on, zero threads, zero posts???

Nice on the "sunshine", btw, sweetness.

[neon beach]

YOU ^^ Need an accountant.

[blondjuls]

I don't need an accountant for stuff Accounting 101 teaches you. You want to dispute it.

Go ahead....whats wrong with it?

[neon beach]

Ummm, you cannot just decide on you own how you wanna depreciate things.

[blondjuls]

Umm...yeah you can. Its text book straight-line.

Sorry buddy, I went to college.

[neon beach]

Dr. Nick's Upstairs Tanning College doesn't count.

[blondjuls]

I went to the University of Alabama and the University of Houston, majored in Business Management and Marketing.

Heres a little reading for you..

http://accountinginfo.com/study/dep/depreciation-01.htm
This one has an example of straight line but depreciates monthly (for the extra equation work)

http://www.answers.com/topic/straigh...on?cat=biz-fin
Exactly how I did it.

http://www.businesstown.com/accounti...preciation.asp
This one gives an example of a truck used for business and is depreciated its entire life, to zero over ten years.

Its simple...sad really that you can't at least grasp that concept.