Current Attempt in Progress Pharoah Company purchased a new machine for $262,500. It is estimated that the machine will have a $26,250 salvage value at the end of its 5-year useful service life. The double-declining-balance method of depreciation will be used Prepare a depreciation schedule that shows the annual depreciation expense on the machine for its 5-year life. Book Value Beginning of Year 262500 262500 262500 262500 262500 Annual Depreciation Expense 47250 Accumulated Depreciation End of Year 47250 Book Value I 1
Current Attempt in Progress Pharoah Company purchased a new machine for $262,500. It is estimated that the machine will have a $26,250 salvage value at the end of its 5-year useful service life. The double-declining-balance method of depreciation will be used Prepare a depreciation schedule that shows the annual depreciation expense on the machine for its 5-year life. Book Value Beginning of Year 262500 262500 262500 262500 262500 Annual Depreciation Expense 47250 Accumulated Depreciation End of Year 47250 Book Value I 1
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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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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Transcribed Image Text:Current Attempt in Progress
Pharoah Company purchased a new machine for $262,500. It is estimated that the machine will have a $26,250 salvage value at the
end of its 5-year useful service life. The double-declining-balance method of depreciation will be used.
Prepare a depreciation schedule that shows the annual depreciation expense on the machine for its 5-year life.
LA
Book Value
Beginning
of Year
List of Accounts
Save for Later
262500
262500
262500
262500
262500
Annual
Depreciation
Expense
47250
Accumulated
Depreciation
End of Year
47250
$
Book Value
I
1
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