Problem 29-4 (ACP) Notorious Company provided the following data related to an equipment on the date of revaluation: Cost Replacement cost Equipment Residual value Useful life in years Age of the machinery Accumulated depreciation 6,500,000 500,000 9,200,000 200,000 12 2 ? Required: 1. Prepare journal entries for the current year. 2. What is journal entry for the sale of the equipment for P8,000,000, one year after revaluation?
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.
Please answer the required part:
1.Prepare journal entries for the current year.
2. What is
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