<P> Composite life equals the total depreciable cost divided by the total depreciation per year . $5,900 / $1,300 = 4.5 years . </P> <P> Composite depreciation rate equals depreciation per year divided by total historical cost . $1,300 / $6,500 = 0.20 = 20% </P> <P> Depreciation expense equals the composite depreciation rate times the balance in the asset account (historical cost). (0.20 * $6,500) $1,300 . Debit depreciation expense and credit accumulated depreciation . </P> <P> When an asset is sold, debit cash for the amount received and credit the asset account for its original cost . Debit the difference between the two to accumulated depreciation . Under the composite method no gain or loss is recognized on the sale of an asset . Theoretically, this makes sense because the gains and losses from assets sold before and after the composite life will average themselves out . </P>

The depreciation method with the formula =db(cost salvage life period month ) is the ____ method