A copy machine acquired with a cost of $1,410 has an estimated useful life of 4 years. It is also expected to have a useful operating life of 13,350 copies. Assuming that it will have a residual value of $75, determine the depreciation for the first year by the following methods: For part a, enter your answer to two decimal places. a. Straight-line method $fill in the blank 1 b. Double-declining-balance method $fill in the blank 2 c. Units-of-activity method (4,500 copies were made the first year) $fill in the blank 3
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 copy machine acquired with a cost of $1,410 has an estimated useful life of 4 years. It is also expected to have a useful operating life of 13,350 copies. Assuming that it will have a residual value of $75, determine the depreciation for the first year by the following methods:
For part a, enter your answer to two decimal places.
| a. Straight-line method | $fill in the blank 1 |
| b. Double-declining-balance method | $fill in the blank 2 |
| c. Units-of-activity method (4,500 copies were made the first year) | $fill in the blank 3 |
Trending now
This is a popular solution!
Step by step
Solved in 2 steps with 2 images
