al $11,000 to transport the machinery to its warehouse and $6,000 to train its employees on how to operate it. Shuttlecraft expects to use the machinery for 18 years and estimates a residual value of $11,000. Shuttlecraft uses the diminishing balance method to depreciate its capital assets at a rate of 15%. What should Shuttlecraft record as depreciation expense at December 31, 20x5? Question 4 options: $46,650
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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On January 1, 20x5, Shuttlecraft Corporation purchased a piece of machinery for $300,000 and paid an additional $11,000 to transport the machinery to its warehouse and $6,000 to train its employees on how to operate it.
Shuttlecraft expects to use the machinery for 18 years and estimates a residual value of $11,000. Shuttlecraft uses the diminishing balance method to
What should Shuttlecraft record as depreciation expense at December 31, 20x5?
Question 4 options:
$46,650
$45,000
$47,550
$16,667
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