Depreciation Methods On January 1, 2023, Loeffler Company acquired a machine at a cost of $462,000. Loeffler estimates that it will use the machine for 4 years or 10,000 machine hours. It estimates that after 4 years the machine can be sold for $22,000. Loeffler uses the machine for 2,100 and 2,500 machine hours in 2023 and 2024, respectively. Requ Compute depreciation expense for 2023 and 2024 using the: 1. Straight-line method of depreciation. Depreciation Expense 2023 2024 2. Double-declining-balance method of depreciation. Depreciation Expense 2023 2024 3. Units-of-production method of depreciation. Depreciation Expense 2023 2024
Depreciation Methods On January 1, 2023, Loeffler Company acquired a machine at a cost of $462,000. Loeffler estimates that it will use the machine for 4 years or 10,000 machine hours. It estimates that after 4 years the machine can be sold for $22,000. Loeffler uses the machine for 2,100 and 2,500 machine hours in 2023 and 2024, respectively. Requ Compute depreciation expense for 2023 and 2024 using the: 1. Straight-line method of depreciation. Depreciation Expense 2023 2024 2. Double-declining-balance method of depreciation. Depreciation Expense 2023 2024 3. Units-of-production method of depreciation. Depreciation Expense 2023 2024
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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On January 1, 2023, Loeffler Company acquired a machine at a cost of $462,000. Loeffler estimates that it will use the machine for 4 years or 10,000 machine hours. It
estimates that after 4 years the machine can be sold for $22,000. Loeffler uses the machine for 2,100 and 2,500 machine hours in 2023 and 2024, respectively.
Requ
Compute depreciation expense for 2023 and 2024 using the:
1. Straight-line method of depreciation.
Depreciation Expense
2023
2024
2. Double-declining-balance method of depreciation.
Depreciation Expense
2023
2024
3. Units-of-production method of depreciation.
Depreciation Expense
2023
2024
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Step 1: Introducing Depreciation Expense
VIEWStep 2: Calculate the Depreciation Expense Using Straight Line Method
VIEWStep 3: Calculate the Depreciation Expense Using Double Declining Balance Method
VIEWStep 4: Calculate the Depreciation Expense Using Units of Production Balance Method
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