a producer bought a machine for $100,000 on Janauary 1, 2012 and estimated the economic life of 4 years. Calculate the deprereciation expense in the second year if the depreciation method used is the reducing balance method at 40% per annum of reducing balance
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 producer bought a machine for $100,000 on Janauary 1, 2012 and estimated the economic life of 4 years. Calculate the deprereciation expense in the second year if the
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