A. On 1 Angust 2018, a company purchased new machinery with an estimated useful life of 10 years. Cost of the machinery was @55,000,with a residual value of $5000. Required: Compute the deprecaition on this machinery in 2018 and 2019 using the straight-line method and the half-year convention. (show working)   b. Amy Company sells equipment on 30 September 2018, for cash $20,000. The equipment originally cost $72000 and as of 30 September 2018 ,had accumulated depreciation of $42,000.   Required: (Explanation for thr journak entry is NOT required.)   Prepare the journal entry to record the sale of equipment.

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A: Journal: Journal is the book of original entry. Journal consists of the day-to-day financial…

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A: Depreciation = Total Cost of Equipment - Salvage ValueUseful life

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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.