Blossom Company had the following assets on January 1, 2025. Item Machinery Forklift Truck Cost $58,000 17,000 23,400 Date Purchase Date Jan 1, 2015 Jan 1, 2022 Jan 1, 2020 Useful Life (In years) 10 5 Salvage Value Account Titles and Explanation (To record sale of forklift) During 2025, each of the assets was removed from service. The machinery was retired on January 1. The forklift was sold on June 30 for $10,700. The truck was discarded on December 31. Journalize all entries required on the above dates, including entries to update depreciation, where applicable, on disposed assets. The company uses straight-line depreciation. All depreciation was up to date as of December 31, 2024. (List all debit entries before credit entries. Credit account titles are automatically Indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry for the account titles and enter O for the amounts) (To record depreciation expense on forklift) $0 0 (To record depreciation expense on truck) 3,000 Debit NOOL FC Credit

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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.