Clarke Corporation placed in service the following assets over the last 6 years. The company didn’t purchase any assets in 2021. Compute the maximum depreciation for 2021. Asset Placed in Service Basis Equipment August 14, 2016, $ 100,000 Manufacturing equipment November 15, 2017 78,000 Computer system June 1, 2020 16,000
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.
Clarke Corporation placed in service the following assets over the last 6 years. The company didn’t purchase any assets in 2021. Compute the maximum
Step by step
Solved in 2 steps with 1 images
