Katherine Jewel Co. purchased a crystal extraction machine for $50,000 that has an estimated savage value of $10,000 at the end of its 8 year useful life. Compute the depreciation schedule using: 1- Staright line depreciation 2- Double declining balance depreciation 3- 100% bonus depreciation 4 MACRS depreciation
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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Katherine Jewel Co. purchased a crystal extraction machine for $50,000 that has an estimated savage value of $10,000 at the end of its 8 year useful life. Compute the
1- Staright line depreciation
2- Double declining balance depreciation
3- 100% bonus depreciation
4 MACRS depreciation
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