On April 1, 2016, Cyclone's Backhoe Co. purchases a trencher for $312,000. The machine is expected to last five years and have a salvage value of $56,000. Compute depreciation expense for both years ending December 2016 and 2017 assuming the company uses the double-declining-balance method. (Enter all amounts positive values.)
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 following information applies to the questions displayed below.]
On April 1, 2016, Cyclone's Backhoe Co. purchases a trencher for $312,000. The machine is expected to last five years and have a salvage value of $56,000.
Compute
Trending now
This is a popular solution!
Step by step
Solved in 2 steps
