ABC Co. imported a machine on January 2, 2020 for P550,000. In addition, ABC Co. incurred these costs: import and custom duties: P30,000 non-refundable purchase taxes: P20,000 transportation: P5,000 installing the machine: P2,600 testing and trial run: P3,000 The cost of the machine must be * P550,000 P560,600 P587,600 P610,600 answer not given
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.
ABC Co. imported a machine on January 2, 2020 for P550,000. In addition, ABC Co. incurred these costs: import and custom duties: P30,000 non-refundable purchase taxes: P20,000 transportation: P5,000 installing the machine: P2,600 testing and trial run: P3,000 The cost of the machine must be *
P550,000
P560,600
P587,600
P610,600
answer not given
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