Prepare the following table: eoy is end of year Straight line Double declining balance Dep’n expense Book value(eoy) Year Dep’n expense Book value(eoy) _______ ________ 2014 ________
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 January 1, 2014, the Greenland Corporation purchased equipment for $80,000. The equipment has a 8 year useful life and has $16,000 residual value. [Book value means historical cost ($80,000) less
Required:
Prepare the following table: eoy is end of year
Straight line Double declining balance
Dep’n expense Book value(eoy) Year Dep’n expense Book value(eoy)
_______ ________ 2014 _________ _________
_______ ________ 2015 _________ _________
_______ _________ 2016 _________ __________
_______ _________ 2017 _________ __________
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