QUESTION 50 Compaq Company purchased a new van for floral deliveries on January 1, 2020. The van cost $125,000 with an estimated life of 4 years and $13,000 salvage value at the end of its useful life. The double-declining-balance method of depreciation will be used. Calculate the accumulated depreciation at the end of December 31, 2021 using the double-declining method. (Please enter answer rounded to the nearest dollar, i.e. 3,078.923 would be entered as 3,079)
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 do not give solution in image format thanku
Step by step
Solved in 4 steps
