23. On April 1, 2010, a machine was purchased for $90,000. The machine has anestimated salvage value of $6,000 and an estimated useful life of 5 years. Thecompany applies the double-declining-balance method of depreciation and closesits books on December 31. How much is the accumulated depreciation balance onDecember 31, 2014?a. $52,200b. $67,320c. $81,835d. $82,584
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.
23. On April 1, 2010, a machine was purchased for $90,000. The machine has an
estimated salvage value of $6,000 and an estimated useful life of 5 years. The
company applies the double-declining-balance method of
its books on December 31. How much is the
December 31, 2014?
a. $52,200
b. $67,320
c. $81,835
d. $82,584
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