On July 1, 2022, Piscor Corporation purchased factory equipment for P450,000. Residual value was estimated to be P12,000. The equipment will be depreciated over ten years using the double-declining balance method. Counting the year of acquisition as one-half year, Piscor should report depreciation expense for 2023 on this equipment of: A . 90,000 B. 81,000 C. 78,840 D. 72,000
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.
On July 1, 2022, Piscor Corporation purchased factory equipment for P450,000. Residual value was
estimated to be P12,000. The equipment will be
balance method. Counting the year of acquisition as one-half year, Piscor should report depreciation
expense for 2023 on this equipment of:
A
.
90,000 B. 81,000 C. 78,840 D. 72,000
Trending now
This is a popular solution!
Step by step
Solved in 2 steps
