MODULE 5 DEPRECIATION With the following information please answer the following questions and journalize the transaction. What is the amount of depreciation at the end of the 3rd year? What is the Book Value at the end of the 3rd year? 1) Company has owned machine for 3 years 2) It has been depreciated using the straight line method 3) Original cost was $980000 4) Salvage is estimated at 6,000 5) Life of 8 years
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.
MODULE 5 DEPRECIATION
With the following information please answer the following questions and journalize the transaction.
What is the amount of depreciation at the end of the 3rd year?
What is the Book Value at the end of the 3rd year?
1) Company has owned machine for 3 years
2) It has been
3) Original cost was $980000
4) Salvage is estimated at 6,000
5) Life of 8 years
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