1). On April 5, a five-year-old asset with a $15,000 salvage value was purchased for $135,000 in cash. What will the depreciation expense be at the end of the first year and for the entire second year using straight-line depreciation? December 31 marks the conclusion of the accounting period for: $18,000 and $24,000. $24,000 and $24,000 $16,000 and $24,000 $20,000 and $424,000
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.
1). On April 5, a five-year-old asset with a $15,000 salvage value was purchased for $135,000 in cash. What will the
$18,000 and $24,000.
$24,000 and $24,000
$16,000 and $24,000
$20,000 and $424,000
2). The gear was $22,800 in price. The gear has a book value of $750. The cost of the gear is $900. Which of the following statements is true?
A $22,050 loss on disposal resulted.
A $150 loss on disposal resulted.
There was a $150 gain on disposal.
There was a $900 gain on disposal.
3. Walmart. paid $20,000 on January 1 for a patent with an 8-year legal life. The patent's useful life, according to Walamrt., will be five years. For the year, amortisation is:
$2,500
$4,000
$2,000
$8,000
Step by step
Solved in 3 steps
