Copy equipment was acquired at the beginning of the year at a cost of $21,500 that has an estimated estimated useful life of 5 years. It is estimated that the machine will output an estimated 975,000 cop made. a. Determine the depreciable cost. LA b. Determine the depreciation rate. Round your answer to two decimal places. $ per copy c. Determine the units-of-activity depreciation for the year. $
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.
The progressive transformation of an asset's cost into an expense is known as depreciation. It refers to allocating the cost of a fixed asset to the periods when the item provides services. Profit is deducted through depreciation. It suggests a decline in serviceability. It is a projected loss in asset value rather than an actual loss. It is an allocation process rather than a valuation method. It mostly results from internal factors like wear and tear or asset depletion.
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