depreciation is taken in the year of acquisition. • No depreciation is taken in the year of disposition. • The straight line method is used. On June 30, 2022, the entity sold for P 2,300,000 a machine acquired in on April 1, 2019 for P 4,200,000. The machinery has estimated useful life of five years and a residual value of P 600,000. 15. the journal entry on June 30, 2022 would be:
depreciation is taken in the year of acquisition. • No depreciation is taken in the year of disposition. • The straight line method is used. On June 30, 2022, the entity sold for P 2,300,000 a machine acquired in on April 1, 2019 for P 4,200,000. The machinery has estimated useful life of five years and a residual value of P 600,000. 15. the journal entry on June 30, 2022 would be:
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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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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France company disclosed that the depreciation policy of on machinery is as follows:
• A full year depreciation is taken in the year of acquisition.
• No depreciation is taken in the year of disposition.
• The straight line method is used.
On June 30, 2022, the entity sold for P 2,300,000 a machine acquired in on April 1, 2019 for P 4,200,000. The machinery has estimated useful life of five years and a residual value of P 600,000.
15. the journal entry on June 30, 2022 would be:
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