Given the following, calculate total current assets. Prepaid insurance=$300 Long-term investments=$1,200 Cash=$540 Prepaid Rent=$2,050 Inventory=$640 Plant assets, at cost=$16,800 Accounts receivable=$5,900 Accumulated depreciation=$6,600
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.
Given the following, calculate total current assets.
Prepaid insurance=$300
Long-term investments=$1,200
Cash=$540
Prepaid Rent=$2,050
Inventory=$640
Plant assets, at cost=$16,800
Accounts receivable=$5,900
Accumulated
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