Ocak Uçan Yağlar Sanayi A.Ş. He bought 6 automatic filling machines and paid a total of 600,000 liras for them. The depreciation life of filling machines is 5 years. In this situation a) If the ordinary depreciation method is applied, what is the depreciation amount to be allocated according to the years? 4. What will be the book value at the end of the year? b) If the rapid depreciation method is applied, what is the depreciation amount to be allocated over the years? 4. What will be the book value at the end of the year?
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.
Ocak Uçan Yağlar Sanayi A.Ş. He bought 6 automatic filling machines and paid a total of 600,000 liras for them. The
a) If the ordinary depreciation method is applied, what is the depreciation amount to be allocated according to the years? 4. What will be the book value at the end of the year?
b) If the rapid depreciation method is applied, what is the depreciation amount to be allocated over the years? 4. What will be the book value at the end of the year?
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