A certain machine has book value of P140,452.78 after 5 years and P66,037.08 after 8 years. The book value is computed using Constant Percentage Method. Determine the initial cost of the equipment and its salvage value in its economic life of 10 years. O P650,000

Q: An asset has a first cost of $12,000, an annual operating cost of $3500 and a salvage value of $5000…

A: Given information: Initial cost=$12,000 Annual cost=$3500 Salvage value=$5000 Life=7 years Interest…

Q: A new barcode reading device has an inslated cost basis of $21,760 and an estimated service ide of…

A: Depreciation is a way to allocate the cost of an asset over the total useful life of an asset. Thus,…

Q: Wildhorse Manufacturing purchases equipment with an expected life of 10 years for $49500. The…

A: The payback period is the time to recover the cost of investment.

Q: A lathe machine cost P300,000 with a salvage value of P15,000 is expected to last for 285000 hours…

A: The depreciation expense is charged on fixed assets as reduction in the value with the usage and…

Q: An asset has a first cost of $12,000, an annual operating cost of $3500 and a salvage value of $5000…

A: Given information: Initial cost=$12,000 Annual cost=$3500 Salvage value=$5000 Life=7 years Interest…

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:

Q: Company A owns an equipmet that costs P510940 . After 8 years, it will have a salvage value of…

A: Note: No intermediate rounding is done and answer is provided to two decimal places. The double…

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.