machine costs PhP 7 654 + 32 x (01), lasts 8 years and has a salvage value at the end of PhP 345. Determine the follwoing: a. Depreciation charge during the 6th year using sum of years digit method b. book value at the end of the 6th year using declining balance method Kindly provide a COMPLETE and
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.
A machine costs PhP 7 654 + 32 x (01), lasts 8 years and has a salvage value at the end of PhP 345. Determine the follwoing:
a.
b. book value at the end of the 6th year using declining balance method
Kindly provide a COMPLETE and CLEAR solutions.
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