A company bought a machine for BD 250,000 which has a useful life of 10 years and can be sold for BD50,000 at the end of its useful life.Determine thedepreciation on the 8th year and book value at the end of 8th year using sinking fund if interest is 12%.Prepare the depreciation schedules.

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Description: A company bought a machine for BD 250,000 which has a useful life of 10 years and can be sold for BD50,000 at the end of its useful life.Determine thedepreciation on the 8th year and book value at the end of 8th year using sinking fund if interest i

Value of a Machine Purchased 250000 Useful Life 10 years Salvage Value 50000…

Answered: Prepare the depreciation schedules.

Business

Accounting

Prepare the depreciation schedules.

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter9: Capital Budgeting And Cash Flow Analysis

Section9.A: Depreciation

Problem 1P

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Concept explainers

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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A company bought a machine for BD 250,000 which has a useful life of 10 years and can be sold for BD50,000 at the end of its useful life.Determine the
depreciation on the 8th year and book value at the end of 8th year using sinking fund if interest is 12%.
Prepare the depreciation schedules.

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