NOTE 16 - COMPUTER EQUIPMENT & ACCESSORIES
A variety of computer equipment and computer accessories has been budgeted at various stages throughout the forecasted period. The following equipment budget is allotted to the computer equipment account.
START-UP PHASE |
YEAR 1 | YEAR 2 | YEAR 3 | |
Equipment Purchase Budget per Year | $7,602 | $4,966 | $5,000 | $8,000 |
The above equipment is estimated to have a useful life of four (4) years and a salvage value of Zero. The equipment is depreciation over its useful life, using the straight-line depreciation method. The yearly depreciation expenses are as follows;
YEAR 1 | YEAR 2 | YEAR 3 | |
Depreciation Expense - Equipment | $3,142 | $4,392 | $6,392 |
On the Company's forecasted balance sheet, an account called Net Computer Equipment can be viewed. This account considers depreciation expenses to estimate the current market value of the computer equipment at the end of each fiscal year. Below provides the calculation used in determining the Net Computer Equipment account balances.
START-UP
PHASE
|
YEAR 1 | YEAR 2 | YEAR 3 | |
Computer Equipment | $ 7,602 | $12,568 | $17,568 | $25,568 |
Accumulated Depreciation - Equipment | $ 0 | $ 3,142 | $ 7,534 | $13,926 |
Net Computer Equipment | $ 7,602 | $ 9,426 | $10,034 | $11,642 |