Beginning of year Assets Liabilities End of year Assets Liabilities Changes during the year Owner investments Net income (loss) Owner withdrawals Company A $ 49,000 40,180 54,000 ? 6,000 12,980 3,500 Company B $ 38,220 26,754 38,880 26,438 1,400 ? 2,000 Company C $ 31,360 16,934 ? 17,728 9,750 6,800 5,875 Company D $ 87,220 60, 181 98,280 47,174 ? 17,067 0 Company E $ 133,770 ? 149,040 117,741 6,500 9,045 11,000
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.
The following financial statement information is from five separate companies. What is the amount of equity at the beginning of the year for Company A?
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