Equipment = $ 70000 Salvage value = $ 1000 Useful life = 12 years After depreciation book value of Equipment = 40100
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.
Equipment = $ 70000
Salvage value = $ 1000
Useful life = 12 years
After
To get the After depreciation book value of Equipment = 40100, what is the time period of asset use?
Find Time in years.
Step by step
Solved in 2 steps
