Dell Farms Ltd. sold equipment during 2022 that had originally been purchased for $ 252,000. The equipment had a net book value of $144,000 at the time of the sale when it sold for $168,000. On January 1, 2022 the Accumulated Depreciation - Equipment account had a balance of $688,000 and on December 31, 2022 this same account had a balance of $ 736, 000. How much depreciation expense, related to equipment, was recorded in the 2022 statement of earnings?
Dell Farms Ltd. sold equipment during 2022 that had originally been purchased for $ 252,000. The equipment had a net book value of $144,000 at the time of the sale when it sold for $168,000. On January 1, 2022 the Accumulated Depreciation - Equipment account had a balance of $688,000 and on December 31, 2022 this same account had a balance of $ 736, 000. How much depreciation expense, related to equipment, was recorded in the 2022 statement of earnings?
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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Transcribed Image Text:Dell Farms Ltd. sold equipment during 2022 that had originally been purchased for $
252,000. The equipment had a net book value of $144,000 at the time of the sale when it
sold for $168,000. On January 1, 2022 the Accumulated Depreciation Equipment account
had a balance of $688,000 and on December 31, 2022 this same account had a balance of $
736, 000. How much depreciation expense, related to equipment, was recorded in the 2022
statement of earnings?
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