A crane rental company has acquired a new heavy-duty crane for $260,000. The company calculates depreciation on this equipment on the basis of a number of rentals per year, and the salvage value of the crane at the end of its 9-year life is 525,000 If the crane is rented an average of 130 days per year, what is the depreciation rate per rental? The depreciation is Sper day of rent. (Round to the nearest dollar.)
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.
A crane rental company has acquired a new heavy-duty crane for $260,000. The company calculates
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