On January 1 of the current year, the Donavin Essak Company purchased factory equipment for $61,000. The factory quipment has an estimated useful life of 5 years and an estimated salvage value of $6,000. Complete the depreciation chedule below. Each formula in column D must include the SLN function. Cost Salvage Life (in years) Year 1 2 3 4 5 $61,000 $6,000 5 January 1 book value $61,000 Depreciation Expense Accumulated Depreciation December 31 book value
On January 1 of the current year, the Donavin Essak Company purchased factory equipment for $61,000. The factory quipment has an estimated useful life of 5 years and an estimated salvage value of $6,000. Complete the depreciation chedule below. Each formula in column D must include the SLN function. Cost Salvage Life (in years) Year 1 2 3 4 5 $61,000 $6,000 5 January 1 book value $61,000 Depreciation Expense Accumulated Depreciation December 31 book value
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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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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Transcribed Image Text:On January 1 of the current year, the Donavin Essak Company purchased factory equipment for $61,000. The factory
3 equipment has an estimated useful life of 5 years and an estimated salvage value of $6,000. Complete the depreciation
4 schedule below.
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Each formula in column D must include the SLN function.
Cost
Salvage
Life (in years)
Year
1
2
3
Instructions
4
5
SLN
Ready Accessibility: Investigate
$61,000
$6,000
5
January 1 book
value
$61,000
Depreciation
Expense
Accumulated
Depreciation
December 31
book value
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