Frey, Inc. purchased a machine for $600,000 on January 2, 2017. The machine has an estimated useful life of 4 years and a salvage value of $100,000. The machine is being depreciated using the sum-of-the-years-digits method. The December 31, 2018 asset balance, net of accumulated depreciation, should be: Select one: a. $250,000 Ob $350,000 c $280,000 d. $320,000 2450.000
Frey, Inc. purchased a machine for $600,000 on January 2, 2017. The machine has an estimated useful life of 4 years and a salvage value of $100,000. The machine is being depreciated using the sum-of-the-years-digits method. The December 31, 2018 asset balance, net of accumulated depreciation, should be: Select one: a. $250,000 Ob $350,000 c $280,000 d. $320,000 2450.000
Chapter11: Long-term Assets
Section: Chapter Questions
Problem 4EB: Montello Inc. purchases a delivery truck for $25,000. The truck has a salvage value of $6,000 and is...
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Depreciation Methods
The word "depreciation" is defined as an accounting method wherein the cost of tangible assets is spread over its useful life and it usually denotes how much of the assets value has been used up. The depreciation is usually considered as an operating expense. The main reason behind depreciation includes wear and tear of the assets, obsolescence etc.
Depreciation Accounting
In terms of accounting, with the passage of time the value of a fixed asset (like machinery, plants, furniture etc.) goes down over a specific period of time is known as depreciation. Now, the question comes in your mind, why the value of the fixed asset reduces over time.
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