# Activity Method Depreciation Calculator

Contents

### Activity Method Depreciation Calculator

#### Step 2: Enter the Salvage Value

• Input: In the “Salvage Value” field, enter the estimated value of the asset at the end of its useful life. This is the amount you expect to receive if you sell the asset after its useful life.
• Example: If you expect the machine to be worth $5,000 at the end of its useful life, enter “5000” in the Salvage Value field. #### Step 3: Enter the Total Expected Activity • Input: In the “Total Expected Activity” field, enter the total amount of usage you expect the asset to have over its useful life. This could be in terms of hours, miles, units produced, etc., depending on the type of asset. • Example: If you expect the machine to run for 10,000 hours over its lifetime, enter “10000” in the Total Expected Activity field. #### Step 4: Enter the Actual Activity for the Period • Input: In the “Actual Activity This Period” field, enter the actual amount of usage the asset had during the specific period for which you want to calculate depreciation. • Example: If the machine was used for 500 hours during the period, enter “500” in the Actual Activity This Period field. #### Step 5: Click the “Calculate” Button • Action: After entering all the required information, click the “Calculate” button. The calculator will instantly compute the depreciation for the period based on the activity method. #### Step 6: Review the Depreciation Result • Output: The calculated depreciation value will be displayed in the “Depreciation” section of the calculator. This is the amount by which the asset’s value has decreased during the period based on its usage. • Example: Based on the examples provided: • Cost of Asset:$50,000
• Salvage Value: $5,000 • Total Expected Activity: 10,000 hours • Actual Activity This Period: 500 hours • Calculation: $\text{Depreciation}=\frac{\left(50,000-5,000\right)}{10,000}×500=\mathrm{}2,250$ • Result: The depreciation for this period is$2,250.