cheba construction company acquired a new crane for 360,000$ at the beginning of year 1. the crane has an estimated residual value of $35,000 and the estimated useful life of five years. the crane is expected to last 10,000 operating hours. it was used 1800 hours in year 1,2000 hours in year2 and2500 hours in year 3. based on the information given above. a. compute the anual depreciation and carrying values for the crane for each of the first three years under each of the following methods, straight line method
Depreciation Methods
The word "depreciation" is defined as an accounting method wherein the cost of tangible assets is spread over its useful life and it usually denotes how much of the assets value has been used up. The depreciation is usually considered as an operating expense. The main reason behind depreciation includes wear and tear of the assets, obsolescence etc.
Depreciation Accounting
In terms of accounting, with the passage of time the value of a fixed asset (like machinery, plants, furniture etc.) goes down over a specific period of time is known as depreciation. Now, the question comes in your mind, why the value of the fixed asset reduces over time.
cheba construction company acquired a new crane for 360,000$ at the beginning of year 1. the crane has an estimated residual value of $35,000 and the estimated useful life of five years. the crane is expected to last 10,000 operating hours. it was used 1800 hours in year 1,2000 hours in year2 and2500 hours in year 3. based on the information given above.
a. compute the anual
Step by step
Solved in 3 steps with 2 images
