Required information [The following information applies to the questions displayed below] On October 1, 2024, the Allegheny Corporation purchased equipment for $115,000. The estimated service life of th equipment is 10 years and the estimated residual value is $5,000. The equipment is expected to produce 220,00C during its life. Required: Calculate depreciation for 2024 and 2025 using each of the following methods. Partial-year depreciation is calcula based on the number of months the asset is in service. Straight-line

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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.