ABC Company acquired an equipment on January 1, 2020 for P5,000,000. Depreciation is computed using the straight-line method. The estimated useful life of the equipment is five years with no residual value. A specific price index applicable to the equipment was 150 on January 1, 2020 and 225 on December 31, 2020. What is the unrealized holding gain on the equipment to be reported in 2020?       1,250,000       1,500,000

Q: The following data relate to the acquisition of an equipment owned by BUSS Corporation. Acquisition…

A: Depreciation under Straight line  method cost - residual value / usefeel life of Asset $125000 -…

Q: Provide the journal entries necessary to account for all the above transactions and events up to 1…

A: Journal entries is the recording of the business transactions in a manner which gives dual effect of…

Q: Softvoice Company disclosed that the depreciation policy on machinery is as follows A full year…

A: A reduction in the value of assets because of regular usage of assets is termed depreciation. The…

Q: On January 1, 2018, an entity purchased a machine for P7,200,000 and depreciated it by the straight…

A: Since there are multiple questions, we will solve first for you. To get the remaining questions…

Q: At the half of the year 2021, Rosary Co. reported the following information: Equipment t cost…

A: Revaluation surplus is the amount which is reported at the year-end after computing the surplus by…

Q: EMSN Corp. purchased PPE on January 1, 2020 for $7,221,000. The production estimates the asset will…

A: Hi student Since there are multiple questions, we will answer only first question.  Depreciation is…

Q: Goliath Company purchased an equipment on January 2, 2017 for P3,000,000. At the date of…

A: The following computations are done for Goliath Company.

Q: Netsol Communication purchased equipment on January 1, 2018, for $27,500. Suppose Netsol…

A: Formula: Ending book value = Beginning book value - Accumulated  depreciation.

Q: 6. During 2020, Mannix Company determined that machinery being depreciated by the straight-line…

A: Depreciation records the usage of a fixed asset over a period of time and allocates its cost to the…

Q: 22 Budgetary Control and Responsibility Accounting Budget $25,000 Actual Service revenue Allocated…

A: Responsibility Report: It is a report which compares the actual costs incurred with the estimated…

Q: On October 1, 2021, Hess Company places a new asset into service. The cost of the asset is $120,000…

A: Depreciation expense: Depreciation expense is the reduction in a particular asset due to its use or…

Q: What was the acquisition cost of the equipment?

A: Given the salvage value = 15000 Useful life = 10 years Depreciation for 4th year = 63636 If the…

Q: siness in 2019 and acquired $600,000 of equipment at the beginning of 2019. It decided to use the…

A: Harley Davis Inc. started its unicycle manufacturing business in 2019 and acquired $600,000 of…

Q: Hadley Zavis Inc. started its unicycle manufacturing business in 2020 and acquired $600,000 of…

A: Depreciation is the reduction in value of fixed assets over the period. Under straight line method,…

Q: Nicholson Company purchased equipment on January 1, 2018, for €120,000 with an estimated residual…

A: Depreciation is considered an expense charge on the value of the asset. It can be calculated by…

Q: Cutter Enterprises purchased equipment for $72.000 on January 1, 2018. The equipment is expected to…

A: Accounting: It is the process of collecting, recording, analyzing the cost, summarizing cost,…

Q: On May 22, 2020, Colossal Corporation purchased machinery for $80,000. The useful life of this…

A: Given that, cost of the asset = $80000 salvage value of asset = $10000 useful life of asset = 10…

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.