Am currently doing an assignment but not sure how the calculation was done for this question am not sure where the person got the last part 10/12 can u explain where it came from? Can u explain how the calculation was done? The computer equipment was acquired on March 1, 2018 and is being depreciated over 10 years on the double-declining method of depreciation, down to a residue of $60,000.
Am currently doing an assignment but not sure how the calculation was done for this question am not sure where the person got the last part 10/12 can u explain where it came from? Can u explain how the calculation was done?
- The computer equipment was acquired on March 1, 2018 and is being
depreciated over 10 years on the double-declining method of depreciation, down to a residue of $60,000.
![b Answered: The following trial bal X
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Date
Account title and explanation
Debit
Credit
31-Dec Insurance expense [$450,000 × 8/12]
Prepaid insurance
[To record the insurance expense]
$300,000
$300,000
Depreciation expense - Furniture and fixtures
31-Dec [$1,000,000 - $100,000]y/10
$90,000
Accumulated depreciation - Furniture and
fixtures
$90,000
[To record the depreciation expense on furniture
and fixtures]
Depreciation expense - computer equipment
31-Dec [$600,000 × (1/10 × 2) × 10/12]
$100,000
Accumulated depreciation - Furniture and
fixtures
$100,000
[To record the depreciation expense on furniture
and fixtures]
31-Dec Wages expense
Wages pavable
$15,000
Privacy - Terms
$15.000
9:28 AM
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Assets: Assets are the resources of an organization used for the purpose of business operations. They include both current and non-current assets. The assets which are used or are converted into cash within a year or less are called current assets and assets which are used for long term i.e. more than a year are called non-current or long term assets.
Depreciation: It is the value of the asset diminished for its use in the business operations. Thus, a portion of the value used in a year is treated as expense and is charged against the revenues.
Useful life: It is the period during which the asset is expected to work or is used for the purpose of business operations.
Salvage value: It is the expected value that can be fetched for an asset at the end of its useful life.
Double declining balance method: It is also called accelerated depreciation method where in which the depreciation on asset is charged more in it's initial years of useful life than in the later years.
First calculate the rate of depreciation.
The rate of depreciation under this method is calculated by using the following formula
1/useful life x 2
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