Prepare a table showing depreciation and book value for each of the four Year
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.
Short Answer. In early January 2013, New Tech purchases computer equipment for $154,000 to use in operating activities for the next four years. It estimates the equipment's salvage value at $25,000. Prepare a table showing
of the four Year
2013
2014
2015
2016
Total
years assuming straight-line depreciation. Beginning Book Value
Annual Depreciation
(Cost)
$154,000
Year-end Book Value
$25,000 (Salvage)
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