1. An equipment has a first cost of P500,000 and the cost of installatic is P30,000. If the salvage value is

Q: An item of property, plant, and equipment costs $200,000; 30% of this cost is attributable to land,…

A: Step 1: Define Fixed Assets:Another term of property, plant, and equipment is fixed asset or plant…

Q: For the below ME alternatives, which machine should be selected based on the AW analysis. MARR-10%…

A: Machine B : AW = 10484.65

Q: A company is considering three pieces of equipment. Equipment A has a first cost of $80,000, AOC of…

A: NPV represents the amount of profitability generated by an investment and is expressed in absolute…

Q: A piece of equipment has a first cost of $165,000, a maximum useful life of 7 years, and a market…

A: The estimated span of time that an asset will be beneficial to the average owner is referred to as…

Q: A machine has an initial cost of P91,123.71 and a salvage value of P14,839.26 after 7 years. What is…

A: Total Depreciation under Straight Line Depreciation = Annual Depreciation x No. of years Annual…

Q: An automated assembly robot that cost $400,000 has a depreciable life of five years with a $100,000…

A: The book value is the cost of the assets less the depreciation for the period. The depreciation is…

Q: An asset costing $10,000 has the salvage values and operating cost shown below. Using 8%, when…

A: Calculate the net cash outflow as follows: Formulas:

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.