no residual value), it has already been depreciated by €12,000 in the previous years, while the depreciation rate is 10% (fixed depreciation method) Wanted: a) the carrying out of the calendar entries during the month of December 2021 b) and the adjustment entries on 31.12.2021 for the above events
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.
During December of the fiscal year 2021, the following accounting events took place:
1. Rents of the company's warehouses worth €3,000 are prepaid in the month of December.
2. Revenues from the provision of services amounting to €4,000 are collected through the face. Subsequently, during the census on 31.12.2021, the following were found:
1. There is a cash deficit of €2,000 and the cause has not been identified.
2. Calculate the
Wanted:
a) the carrying out of the calendar entries during the month of December 2021 b) and the
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