corporation uses a type of a boom crane which costs Php 875,000 with a service life of 6 years and final salvage value of Php 180,000. How much could the corporation afford to pay for another crane of the same purpose whose life is 8 years with a final salvage value of Php 130,000. Money is worth 10%. ( pls write your solution on a paper)
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.
A corporation uses a type of a boom crane which costs Php 875,000 with a service life of 6 years
and final salvage value of Php 180,000. How much could the corporation afford to pay for
another crane of the same purpose whose life is 8 years with a final salvage value of Php 130,000.
Money is worth 10%. ( pls write your solution on a paper)
Step by step
Solved in 3 steps with 1 images
