Q1- In 1/1/2014 ford company purchased equipment for 84,000 with estimated useful life of 8 years and residual value of 12,000 and had used straight-line depreciation during 2014 and 2015. At the beginning of 2016, the company determined that the equipment would be useful to the company for 12 years. Instructions Compute the amount of depreciation expense for the 2016 byusing: a- Straight line
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.
Q1- In 1/1/2014 ford company purchased equipment for 84,000 with estimated useful life of 8 years and residual value of 12,000 and had used straight-line
Instructions
Compute the amount of depreciation expense for the 2016 byusing:
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