For the fiscal year ending May 31, 2014, how much is the depreciation expense? * Given the following unadjusted ledger balances on fiscal year ending May 31, 2014: Account Titles Debit Credit Utilities Expense Advertising Expense Rent Expense Salaries Expense 5,000 7,000 50,000 140,000 Service Income X, Capital Notes Payable Office Equipment Office Furniture 357,100 100,000 15,000 75,000 73,500 95,400 26,200 Accounts Receivable Cash Relevant information: a. No interest has yet been recorded on a 60-day 15% note issued by the company on May 3, 2014. (Use 365 days) b. Office equipment was purchased on July 1, 2013, and estimated to have a useful life of 5 years with no scrap value. c. Office furniture was purchased on June 1, 2013 and estimated to be useful for 10 years with a salvage value of P12,000 at the end of its useful life. d. Management estimated that only 90% of the receivables will be collected. O 21,150 O 22,350 O 19,900 O 21,100
For the fiscal year ending May 31, 2014, how much is the depreciation expense? * Given the following unadjusted ledger balances on fiscal year ending May 31, 2014: Account Titles Debit Credit Utilities Expense Advertising Expense Rent Expense Salaries Expense 5,000 7,000 50,000 140,000 Service Income X, Capital Notes Payable Office Equipment Office Furniture 357,100 100,000 15,000 75,000 73,500 95,400 26,200 Accounts Receivable Cash Relevant information: a. No interest has yet been recorded on a 60-day 15% note issued by the company on May 3, 2014. (Use 365 days) b. Office equipment was purchased on July 1, 2013, and estimated to have a useful life of 5 years with no scrap value. c. Office furniture was purchased on June 1, 2013 and estimated to be useful for 10 years with a salvage value of P12,000 at the end of its useful life. d. Management estimated that only 90% of the receivables will be collected. O 21,150 O 22,350 O 19,900 O 21,100
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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