An electronics balance costs P84,000 and has an estimated salvage value of P6,000 at the end of its 14 years lifetime. What would be the depreciation after three years, using the sum of the years digit in solving for the depreciation?
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.
8
An electronics balance costs P84,000 and has an estimated salvage value of P6,000 at the end of its 14 years lifetime. What would be the
Express your answer in whole number.
Step by step
Solved in 2 steps
