Coronado Inc. owns the following assets: Asset A B C. Cost $419000 O 12.9% O 14.0% O 11% 222000 492000 Salvage $42000 20000 24000 Estimated Useful Life 10 years 5 years 12 years What is the composite depreciation rate of Coronado's assets?
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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