A contractor purchased a wheeled-backhoe for $155,000, with a salvage value of $12,000 at the end of its estimated useful lif of 5 years? The purchase price of the equipment included $6,000 for a set of tires. Given an annual usage of 2,000 hours, maintenance & repairs at 50% of depreciation and an annual interest rate of 12%. What is the depreciation cost per hour? Enter the numbers only, with 2 decimal places, without the dollar sign and no comm
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.
Please solve and show work. The correct answer should be 13.7
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