How do I figure wear on equiptment?

Discussion in 'Landscape Architecture and Design' started by Outdoor Creations, Feb 6, 2008.

  1. Outdoor Creations

    Outdoor Creations LawnSite Member
    Posts: 26

    I was tring to figure out how I put into my pricing wear on trucks, skidloaders, mowers and all other equiptment in to each job. There has to be a standard that would be charged for each job. By the hour used? What better place than this to ask. Any info would be great!
    Thanks,
    Zach
     
  2. SILVERSTREAK INC

    SILVERSTREAK INC LawnSite Senior Member
    Posts: 295

    a way to figure would be to count on all things to turn to dust after 7-9 years

    so inventory all your stuff and say its 90000, well figure you better be putting 10k a year away for replacments, obviously weedwackers and blowers wont last more than 3-5 and being that most have 8 months of the working season, that would be 1250 a month

    and if after 9 years you can still turn around and sell off the trailer and truck and put a few bucks towards the inflation (your 2004 f-250xl that cost you 24,900 is gonna cost prolly 30k by 2012) then good going

    i havent done this but have been thinking more and more about it, and if anyone has a gross margin precentage to add to a job cost that would be awesome!
     
  3. SwihartServices

    SwihartServices LawnSite Member
    Posts: 154

    I'm not an accountant but I'm pretty sure you account for it on your balance sheet as a contra asset called depreciation. I think it goes against equipment value. As far as finding what the dollar amount is I forgot the formula. I do know there is one. Just call up an accountant. They will know.
     
  4. SwihartServices

    SwihartServices LawnSite Member
    Posts: 154

    OK found the answer, the account is called accumulated depreciation. and the IRS has something called a general depreciation schedule that shows how much value a certain asset has lost over a certain period of time.
     

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