On January 1, 2009, Julie Enterprise has an equipment at cost RM135,620 and RM81,374 accumulated depreciations. In 2009, Julie Enterprise purchase new equipment at a cost of RM47,800 by selling old equipment (original cost RM36,000 and accumulated depreciation RM28,224) at fair value (trade-in allowances ) RM5,700. Equipment is depreciated at 40% using the declining -balance method. Depreciation will be charged on all equipment used at the end of the financial year and depreciation on assets disposed will not be charged in the year of disposal. Julie Enterprise financial year ended on December 31, 2009.

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 exp…

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…