On January 1, 2025, the Accumulated Depreciation-Machinery account of a particular company showed a balance of $1470000. At the end of 2025, after the adjusting entries were posted, it showed a balance of $1590000. In 2025, one of the machines which cost $505000 was sold for $241000 cash. This resulted in a loss of $16300. Assuming that no other assets were disposed of during the year, how much was depreciation expense for 2025? $367700 $241000 $400300 $120000
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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