Machine 1 costs X, has a salvage value of X/8, and is to be depreciated over 10 years using declining balance method. Machine 2 costs Y, has a salvage value of X/8, and is depreciated over 10 years using the SOYD method. The total amount of the depreciation in the first seven years for Machine 1 is equal to the total amount of depreciation in the first seven years for Machine 2. Calculate the value of Y/X. (EXPRESS YOUR ANSWER IN 4 DECIMAL PLACE). "ANSWER: 0.9856

Machine 1 costs X, has a salvage value of X/8, and is to be depreciated over 10 years using declining balance method. Machine 2 costs Y, has a salvage value of X/8, and is depreciated over 10 years using the SOYD method. The total amount of the depreciation in the first seven years for Machine 1 is equal to the total amount of depreciation in the first seven years for Machine 2. Calculate the value of Y/X. (EXPRESS YOUR ANSWER IN 4 DECIMAL PLACE). "ANSWER: 0.9856

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Description: Machine 1 costs X, has a salvage value of X/8, and is to be depreciated over 10 years using decliningbalance method. Machine 2 costs Y, has a salvage value of X/8, and is depreciated over 10 years usingthe SOYD method. The total amount of the deprec

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Concept explainers

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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Machine 1 costs X, has a salvage value of X/8, and is to be depreciated over 10 years using declining
balance method. Machine 2 costs Y, has a salvage value of X/8, and is depreciated over 10 years using
the SOYD method. The total amount of the depreciation in the first seven years for Machine 1 is equal to
the total amount of depreciation in the first seven years for Machine 2. Calculate the value of Y/X.
(EXPRESS YOUR ANSWER IN 4 DECIMAL PLACE). *ANSWER: 0.9856

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