On 1 January 20X8 Hendrix Co revalued its property to $200,000. Up to the date of the revaluation, the asset had been accounted for at a cost of $160,000, and had accumulated depreciation $40,000. The property had an expected useful life of fifty years from the date of purchase and nil residual value. State the accounting entries required to account for the revaluation in the financial statements of Hendrix Co. Debit or Credit Account title %24
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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