The sum-of-the-years'-digits method of depreciation is being used for a machine with a 5-year estimated useful life. Which fraction would be applied to the cost to be depreciated in the second year?

Question

Quizplus · Accepted Answer

The sum-of-the-years'-digits method involves calculating the sum of the digits of the years of the asset's useful life (1+2+3+4+5=15 for 5 years). In the second year, the fraction is 4/15, as the second year's digit (4) is divided by the sum of the years' digits (15).

The Sum-Of-The-Years'-Digits Method of Depreciation Is Being Used for a Machine