0n 0et 1, 2018,Net Solutons purchased a piece of high-tech equipment for $384,000, which is expected to hare a fou-year useful life and a residual valve of $24,000. The compamy uses straigh-line depreciaton and has a December 31 fiscal year emd.0n July 1, 2019,$4200 was paid for normal repairs miecesary to keep the eqwipment in god working order. 0n or. 10, 2020, $22,000 cash was paid for a newy componeant expected to mcrease the equipmient's prodmctyvity by 10% a year. 1) Calculate the amnual deprecation expense, Journalize the yearly depreciation erpense at Dec, 31 2019. 2) Journalize the transaction on 0ct. 1, 2018, Jul.1.2019 and Nov. 10.2020.
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.
0n 0et 1, 2018,Net Solutons purchased a piece of high-tech equipment for $384,000, which is expected to hare a fou-year useful life and a residual valve of $24,000. The compamy uses straigh-line depreciaton and has a December 31 fiscal year emd.0n July 1, 2019,$4200 was paid for normal repairs miecesary to keep the eqwipment in god working order. 0n or. 10, 2020, $22,000 cash was paid for a newy componeant expected to mcrease the equipmient's prodmctyvity by 10% a year.
1) Calculate the amnual deprecation expense, Journalize the yearly
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