Que: 3 A company purchased a fixed asset on 1-1-2017 for OMR 100,000 and decided to depreciate it at 10% per annum on straight-line basis. The replacement value of the asset on the following dates was noted as follows 31.12.2017-----OMR 120,000 31.12.2018----OMR 150,000 31.12.2019---OMR 200,000 Assuming depreciation is chargeable on the basis of the year-end replacement value. Under CCA method of inflation accounting, you are required to compute for each of the 3 years: 1. Depreciation adjustment 2. Backlog depreciation
Que: 3 A company purchased a fixed asset on 1-1-2017 for OMR 100,000 and decided to depreciate it at 10% per annum on straight-line basis. The replacement value of the asset on the following dates was noted as follows 31.12.2017-----OMR 120,000 31.12.2018----OMR 150,000 31.12.2019---OMR 200,000 Assuming depreciation is chargeable on the basis of the year-end replacement value. Under CCA method of inflation accounting, you are required to compute for each of the 3 years: 1. Depreciation adjustment 2. Backlog depreciation
Intermediate Accounting: Reporting And Analysis
3rd Edition
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Chapter11: Depreciation, Depletion, Impairment, And Disposal
Section: Chapter Questions
Problem 3E: Depreciation Methods Nickle Company purchased three identical assets for 17,000 on January 2, 2019....
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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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