On July 18, 2018 , the national government granted a parcel of land located in Baliuag , Bulacan to Charie On the date of grant , the land had a value of 2000.000 The grant required Charie to construct a cold storage building on the site Charie finished the construction which has an estimated useful life of 25 years , on January 9, 2019 Chare appropriately recorded the cost of building of 4, 000, 000 but failed to record depreciation in 2019 Unaware if the accounting procedures for government grants , the company did not reflect the grant on its books What is the carrying amount of PPE as of December 31,2019\
On July 18, 2018 , the national government granted a parcel of land located in Baliuag , Bulacan to Charie On the date of grant , the land had a value of 2000.000 The grant required Charie to construct a cold storage building on the site Charie finished the construction which has an estimated useful life of 25 years , on January 9, 2019 Chare appropriately recorded the cost of building of 4, 000, 000 but failed to record depreciation in 2019 Unaware if the accounting procedures for government grants , the company did not reflect the grant on its books What is the carrying amount of PPE as of December 31,2019\
Chapter8: Depreciation, Cost Recovery, Amortization, And Depletion
Section: Chapter Questions
Problem 38P
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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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On July 18, 2018 , the national government granted a parcel of land located in Baliuag , Bulacan to Charie On the date of grant , the land had a value of 2000.000 The grant required Charie to construct a cold storage building on the site Charie finished the construction which has an estimated useful life of 25 years , on January 9, 2019 Chare appropriately recorded the cost of building of 4, 000, 000 but failed to record depreciation in 2019 Unaware if the accounting procedures for government grants , the company did not reflect the grant on its books What is the carrying amount of PPE as of December 31,2019\%
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