3- Process equipment was purchased in the chemical industry in 2018 for 50000 OMR for an expected service life of 10 years. At the end of service life, the salvage value was estimated to be 7000 OMR Prepare a table showing each year's depreciation cost and book value using the following depreciation methods. a) Straight-line method b) Double declining balance method c) Sum of the year's digit method d) MACRS method using half-year convection (Refer to the fixed percentage factor table for the applicable year from the relevant textbook/reference)
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.
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