Brief Exercise 11-6 Your answer is partially correct. Try again. Bramble Inc. owns the following assets. Asset Cost Salvage Estimated Useful Life A $70,700 $7,070 10 years B 51,100 5,110 5 years C 87,740 4,280 12 years Compute the composite depreciation rate and the composite life of Bramble’s assets. (Round answers to 1 decimal place, e.g. 4.8% or 4.8 years.) Composite depreciation rate % Composite life years
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.
Brief Exercise 11-6
| Your answer is partially correct. Try again. | |
|
Asset
|
Cost
|
Salvage
|
Estimated Useful Life
|
|||||
| A | $70,700 | $7,070 | 10 years | |||||
| B | 51,100 | 5,110 | 5 years | |||||
| C | 87,740 | 4,280 | 12 years |
Compute the composite
| Composite depreciation rate |
|
% | |
| Composite life |
|
years |
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