##### Hca/270 R3 Week 5

Use the following form to address the five methods of computing book depreciation for health care organizations: |QUESTION |ANSWER – Do not forget to list references at the bottom of the paper. Write a minimum of 30 words for each area listed. | |Straight Line Depreciation: | | |No salvage |Straight line is most often used because it is not complicated. The assets divided by the number of years it was used.

This requires a fraction to be computed each year and| |Salvage |weighed against what the asset was bought for originally. Salvage what is the end of its useful life. This is also called residual value or scrap value. | |Accelerated Book Depreciation: |This sum is done each year. The numerator is the number of years left over to be classified as depreciated. For example, one year of using an item would equal 3 years of | |Sum of Years’ Digits Method |wear and tear on it. (Justaskfinance. om) | |Accelerated Book Depreciation: |This applies double the straight line rate of depreciation is applied to what is left over of the depreciable basis of the object. (Justaskfinace. com) | |Double Declining Balance Method | | |Accelerated Book Depreciation: |This method applies 150% the straight line rate of depreciation to the remaining depreciable basis of the object that is worth money.

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The units of production that fixed | |150% Declining Balance Method |rate per unit, based on the all the units the asset is expected to operate in a lifetime. | |Accelerated Book Depreciation: |Depreciation is charged according to the actual usage of the assets. In units of production, the higher depreciation is charged when there is higher activity and less is | |Units of Production Method |charged when there is low level of operation.

An example would be cost subtract salvage value. How many units produced divided by the life in the number of units. | | |(www. accountingexplained. com) | |Why is it important for a hospital to pay attention to |The computer software changes often. The hospital cannot keep up with the many versions of software and determine how much they have depreciated. The IRS allows a write off| |depreciation more than a computer software company? immediately because computing the figures on computer’s is time consuming and laboring. A hospital has capital equipment and it takes several years to depreciate hospital | | |furniture or an X ray machine. (Thunderbird Samartain. com) | References 1. Justaskfinace. com 2. ThunderbirdSamaritanHospital. com 3. www. accountingexplained. com

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