Eddie Corporation bought a machine at the beginning of the year at a cost of $11,400 The estimated useful life was eight years and the residual value was $1,000. Assume, Eddie used double declining balance. The depreciation expense for year 1 would be $_______________
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.
|
Eddie Corporation bought a machine at the beginning of the year at a cost of $11,400 The estimated useful life was eight years and the residual value was $1,000. Assume, Eddie used double declining balance. The
|
Step by step
Solved in 2 steps
