b. SYD Method YEAR BOOK VALUE AT THE DEPRECIATION CHARGE BOOK VALUE AT THE BEGINNING OF THE YEAR DURING THE YEAR END OF THE YEAR
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.
A civil engineer bought a crane for erecting tall buildings. It was invoiced from Japan (Cost,
Insurance, freight) to Manila ay P 60, 000. Brokerage, custom’s, permits and etc. total P 120,000. At the end of
10 years, he expects to sell it for P 70,000. Tabulate and determine the
the book value at the end of 6th year(show solution at these years) using the following: Show solutions for the first 2 yrs
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