uary 1, 2019, that originally cost $150,000 is being depreciated on a straight-line basis over an estimated useful life of 8 years, with no residual value. Near the end of 2021, management decided that a better estimate would be a total useful life of
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.
An asset purchased on January 1, 2019, that originally cost $150,000 is being
Question 3 options:
|
|
$11,100 |
|
|
$14,850 |
|
|
$18,750 |
|
|
$13,875 |
Step by step
Solved in 2 steps
