This workout asks us to complete the table using the information below So we're going to need to calculate the depreciation expense The gross amount, accumulated depreciation and net amount for each period from year 1 to year 7 Let's start with the depreciation expense I can see that we have a machine that cost 650,000 and at the end of the 7 years it will be worth 30,000 The estimated life as mentioned, 7 years So we need to use the depreciation expense formula to calculate the depreciation expense That's going to be the 650,000 minus the 30,000 and then divided by the 7 years And you might you notice, I've been putting the dollar signs in the formulas so that when I copy this to the right, we stay on those cells: C7, C9 and C8 So overall I'm going to be depreciating 620,000 of value over 7 years. That gets me a depreciation expense of 88,571.4 Now I'm going to have exactly the same figure go into year 2, so I'm going to copy that just into year 2 for now I'll copy it to year 7 in a moment What's going to be the gross amount (the gross value of this machine)? Well that is going to stay the same in each period The original cost stays at 650,000 each period And the accumulated depreciation after one year is just the depreciation expense, 88,571.4 However, when we go into year 2 I take last year's accumulated depreciation and add on the extra depreciation expense for that year So the accumulative depreciation expense has now doubled Lastly we need to calculate the net amount. The net amount is going to be the gross amount minus the accumulated depreciation So in the first year it's now gone down to 561,428.6 The net amount is the net value or book value or carrying value of this machine on the balance sheet So the net value is what ends up on the balance sheet Again if I copy that to the right, I see the net value is gradually going down as the accumulated depreciation goes up If I copy all of these to the right, I'm going to ask myself What do I expect the net amount to go down to by the end of year 7? Well I've already predicted that It should go down to the 30,000 of the salvage value So I if I copy all of them right, indeed it does The gross amount stayed at 650. The accumulated depreciation, so 7 years of depreciation goes up to 620 That means the net value is now the same as the salvage value, 30,000