on july 1 , 2023 coronado greenhouse purchased a new delivery truck for $153000. she paid $20000 cash and signed promissory note for the remainder. coronado estimates that the delivery truck will have a five year useful life or 350000 kilometres and a residual value of $ 13000 . Coronado green house has a december 31 year end. Coronado drove the truck 28000 km in 2023, 79000 kn in 2024, 82000 in 2025, 77000 in 2026 and 85000 in 2027. prepare a depreciation schedule for the asset under each of the following method straight line method , double diminishing balance and units of production method.
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.
on july 1 , 2023 coronado greenhouse purchased a new delivery truck for $153000. she paid $20000 cash and signed promissory note for the remainder. coronado estimates that the delivery truck will have a five year useful life or 350000 kilometres and a residual value of $ 13000 . Coronado green house has a december 31 year end. Coronado drove the truck 28000 km in 2023, 79000 kn in 2024, 82000 in 2025, 77000 in 2026 and 85000 in 2027. prepare a
Step by step
Solved in 5 steps with 9 images
