During the beginning of 2021, Jambilee Company purchases a newmachine worth P8,000,000, The new machine has an estimated useful lifeof 8 years and the estimated residual value is P800,000.Q1. What will be the value of accumulated depreciation in the year of 2021?Q2. What will be the carrying amount of the machine on December 31,2022?

Name: During the beginning of 2021, Jambilee Company purchases a newmachine
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Description: During the beginning of 2021, Jambilee Company purchases a newmachine worth P8,000,000, The new machine has an estimated useful lifeof 8 years and the estimated residual value is P800,000.Q1. What will be the value of accumulated depreciation in the

Depreciation refers to the loss in the value of a tangible asset over a period of time. There are…

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Business

Accounting

Q1. What will be the value of accumulated depreciation in the year of 2021?

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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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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During the beginning of 2021, Jambilee Company purchases a new
machine worth P8,000,000, The new machine has an estimated useful life
of 8 years and the estimated residual value is P800,000.
Q1. What will be the value of accumulated depreciation in the year of 2021?
Q2. What will be the carrying amount of the machine on December 31,
2022?

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