Crane uses the diminishing-balance method at one times the straight-line depreciation rate. Crane Limited purchased delivery equipment on March 1, 2019, for $135,000 cash. At that time, the equipment was estimated to have a useful life of five years and a residual value of $10,090. The equipment was disposed of on November 30, 2021. Crane uses the diminishing-balance method at one times the straight-line depreciation rate, has an August 31 year end, and makes adjusting entries annually. Record the acquisition of equipment on March 1, 2019. List all debit entries before credit entries
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.
Crane uses the diminishing-balance method at one times the straight-line
Record the acquisition of equipment on March 1, 2019. List all debit entries before credit entries
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Date
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Account Titles and Explanation
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Debit
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Credit
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Mar. 1
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