A company bought a machine for BD300,000 which has a useful life of 7 years and can be sold for BD30,000 at the end of its useful life. Determine the Depreciation schedules, dn Accumulated depreciation, Dn Book value, Cn using straight line method and double declining balance method. Generate the plots using Microsoft excel. 2.Repeat problem #1 if there is an installation cost of BD20,000. 3.Repeat problem #1 if there is a dismantling cost of BD5,000.
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.
- A company bought a machine for BD300,000 which has a useful life of 7 years and can be sold for BD30,000 at the end of its useful life. Determine the
Depreciation schedules, dnAccumulated depreciation , Dn- Book value, Cn
using
2.Repeat problem #1 if there is an installation cost of BD20,000.
3.Repeat problem #1 if there is a dismantling cost of BD5,000.
Trending now
This is a popular solution!
Step by step
Solved in 4 steps with 12 images
