Sagamore Co. purchased a machine on January 1, 2010 for $50,000. The residual value is zero and the estimated useful life is 5 years. Sagamore uses straight-line depreciation. On January 1, 2013, Sagamore took impairment on this machine and wrote it down to $15,000. What is the balance of accumulated depreciation for this machine at the end of 2013?
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.
Subject: accounting
Sagamore Co. purchased a machine on January 1, 2010 for $50,000. The residual value is zero and the estimated useful life is 5 years. Sagamore uses straight-line
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