For each of the following depreciable assets, determine the missing amount. Abbreviations for depreciation methods are SL fc straight-line and DDB for double-declining-balance. Note: Do not round intermediate calculations. Round your final answers to nearest whole dollar. Asset A B C D E Cost Residual Value $ 31,000 62,000 87,000 252,000 211,000 6,000 21,000 31,000 Service Life (Years) 5 8 10 8 Depreciation Method DDB SL SL DDB Depreciation (Year 2) $ 30,000 5,600 9,000 23,100
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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