A piece of equipment costs ₱365,000 including shipping, installation and taxes. The supplier assures a salvage value of ₱20,000 after 20 years. What is the annual straight-line depreciation charge?

Q: A special purpose machine toolset costs $20,000. The toolset will be financed through a bank loan of…

A: The question is based on the calculation for benefit of buying a special purpose machine , which is…

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 piece of equipment has a first cost of $165,000, a maximum useful life of 7 years, and a market…

A: The estimated span of time that an asset will be beneficial to the average owner is referred to as…

Q: A machine was purchased with an amount of P375,000.00 and a modification cost of P100,000.00 after…

A: Capitalization costs include: Installation costs Labor charges Transportation costs Interest…

Q: An asset costs R6 300,000 with a R900,000 salvage value at the end of its ten-year life. If annual…

A: Payback period is one of the simple method of capital budegting techniques and it is the time…

Q: he average annual cost of damages caused by floods to certain subdivision located along Pasig River…

A: Annuity: this is used in case of a future annuity – suppose an equal sum of money is invested in the…

Q: Y Company is considering purchasing a machine for $15,000. The machine will generate a net after-tax…

A: The payback period is one of the capital budgeting technique which use to evaluate the project based…

Q: A company buys a solar panel unit for P105,000. The shipping and installation fees amount to…

A: There are different methods of depreciation. That method of depreciation which is most suited should…

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.