Anne company bought a computer for RM4,500. The estimated useful life of the asset was four years. At the end of the fourth year, the scrap value of the asset was RM500. What is the carrying amount of the asset at the beginning of period three if Anne used the straight line method of 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.
Anne company bought a computer for RM4,500. The estimated useful life of the asset was four years. At the end of the fourth year, the scrap value of the asset was RM500. What is the carrying amount of the asset at the beginning of period three if Anne used the straight line method of
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