Prepare a UOP depreciation schedule based on the given annual usage, then enter the book value at the end of year 3 as your answer. Round all dollar amounts to the nearest cent.
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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Castle Corporation purchased a neon sign for $3,050. Its useful life is estimated as 6,500 hours, with a salvage value of $549. Prepare a UOP
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Depreciation is defined as the reduction in the value of fixed asset due to its usage and wear and tear of the asset until its useful life. The depreciation is the non-cash expense for the business entity, which is charged upon the book value or the value of the asset which may vary as per the method of depreciation used.
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