A man acquired a machinery purchased for PhP 1,100,000.00 and paid for transportation charge of PhP 20,000.00. To install the machine in his plant, he paid installation charges amounting PhP 35,000.00. Scrap value will be PhP 150,000.00 and the useful life of machinery is 15 years. Charge depreciation with the Straight Line Method of depreciation. What is annual depreciation cost of the equipment in pesos?
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 man acquired a machinery purchased for PhP 1,100,000.00 and paid for transportation charge of PhP 20,000.00. To install the machine in his plant, he paid installation charges amounting PhP 35,000.00. Scrap value will be PhP 150,000.00 and the useful life of machinery is 15 years. Charge
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