ABC Company's small tools had a beginning balance of P300,000. Acquisitions and disposal records during the years were as follows: March May Oct Dec Cost of additions 20,000 0 60,000 44,000 Cost of disposals 12,000 24,000 0 36,000 Disposal proceeds 1,000 1,600 0 2,000 Physical count at the end of the year showed P352,000. How much is the depreciation expense under the retirement method?
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 Company's small tools had a beginning balance of P300,000. Acquisitions and disposal records during the years were as follows:
March May Oct Dec
Cost of additions 20,000 0 60,000 44,000
Cost of disposals 12,000 24,000 0 36,000
Disposal proceeds 1,000 1,600 0 2,000
Physical count at the end of the year showed P352,000.
How much is the
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