Concrete Corporation, who has a december 31 year end, purchased a new vehicle on septemper 30, 2018. Cost of Truck : $280,000 Estimated residual (or salvage) value: $5000 Estimated useful life: 10 years Estimated usage (unites) : 125,000km 2018 usage: 13,200km 2019 usage: 22,100 km 2020 usage: 26,407 km Required Answer each of the following questions Please show all calculation. a. calculate the depreciation using Straight Line Depreciation Method at December 31, 2018 b. Calculate the depreciation using Units of Production Method at December 31, 2019 c. Calculate the depreciation using Double-Diminishing Method at December 31, 2020 d. Prepare an Adjusting Journal entry for December 31, 2018 to record depreciation for the year 2018 using Units of Production depreciation.
Concrete Corporation, who has a december 31 year end, purchased a new vehicle on septemper 30, 2018. Cost of Truck : $280,000 Estimated residual (or salvage) value: $5000 Estimated useful life: 10 years Estimated usage (unites) : 125,000km 2018 usage: 13,200km 2019 usage: 22,100 km 2020 usage: 26,407 km Required Answer each of the following questions Please show all calculation. a. calculate the depreciation using Straight Line Depreciation Method at December 31, 2018 b. Calculate the depreciation using Units of Production Method at December 31, 2019 c. Calculate the depreciation using Double-Diminishing Method at December 31, 2020 d. Prepare an Adjusting Journal entry for December 31, 2018 to record depreciation for the year 2018 using Units of Production depreciation.
Chapter1: Financial Statements And Business Decisions
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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.
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Concrete Corporation, who has a december 31 year end, purchased a new vehicle on septemper 30, 2018.
Cost of Truck : $280,000
Estimated residual (or salvage) value: $5000
Estimated useful life: 10 years
Estimated usage (unites) : 125,000km
2018 usage: 13,200km
2019 usage: 22,100 km
2020 usage: 26,407 km
Required Answer each of the following questions Please show all calculation.
a. calculate the depreciation using Straight Line Depreciation Method at December 31, 2018
b. Calculate the depreciation using Units of Production Method at December 31, 2019
c. Calculate the depreciation using Double-Diminishing Method at December 31, 2020
d. Prepare an Adjusting Journal entry for December 31, 2018 to record depreciation for the year 2018 using Units of Production depreciation.
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