Required information [The following information applies to the questions displayed below.] Shahia Company bought a building for $75,000 cash and the land on which it was located for $126,000 cash. The company paid transfer costs of $12,000 ($6,000 for the building and $6,000 for the land). Renovation costs on the building before it could be used were $20,000. . Compute straight-line depreciation at the end of one year, assuming an estimated 10-year useful life and a $11,000

Q: Define Unclassifi ed balance sheet

A: Introduction: Unclassified balance sheets are typically utilized only for internal purposes.…

Q: Classify the Costs for Financial Statements?

A: Cost: The amount paid to purchase the asset, install it, and put it into operations, is referred to…

Q: Describe stakeholder orientation at REI.

A: Introduction: A stakeholder is a person that has an interest in a company and has the ability to…

Q: Distinguish between assets and liabilities.

A: Step 1 Assets can be defined as the resources owned by the organization which is capable of…

Q: Explain principal (agency relationships)

A: Answer: Agent: An agent is one who provides work on principal’s behalf.  Principal approves agent to…

Q: What information is provided by the Vendor Balance Detail Report?

A: The Vendor Balance Detail Report provides a detailed summary of a vendor's balance, including…

Q: Define goodwill for accounting purposes

A: When one firm is acquired by another, an intangible asset known as goodwill is transferred together…

Q: Define Disclosure notes.

A: Disclosure notes in accounting refers to the footnotes which are included in financial statements.

Q: Advantages and Disadvantages of Harmonization of Accounting Standards

A: The process of raising the level of agreement among countries in accounting standards and practices…

Q: Define creditors.

A: Creditor: A creditor is a person or a company who has provided fund or loan, and hence, have a claim…

Q: Define acquiring company

A: The acquisition means when one company buys the more than 51% stake in another company. Companies…

Q: differentiate internal user from external user of accounting information

A: Accounting is the detailed process of recording, classifying, summarising and reporting accounting…

Q: Define accrued liability

A: Accrued Liability is an expense that was incurred before the end of the current period but has not…

Q: which internal users need the accounting information

A: Accounting information data is the data that emerges from business exchanges. When distinguished,…

Q: Define bill-and-hold arrangement with example.

A: Bill on hold: Bill on hold transaction specifies that shipping of the product is not done by the…

Q: What is liability

A: Financial accounting includes recording, collecting, summarizing and interpreting the financial data…

Q: Ethics of accruals and deferrals.

A: Lets understand the meaning of accrual and deferrals. Accrual is a recording income and expense in…

Q: Define Debit

A: Accounting depends on double entry system. As per dual aspect principle of accounting, each and…

Q: Mutual agency is defined

A: In a partnership, two or more parties agree to operate and manage a business and share the profits…

Q: What accounting information system provides?

A: An Accounting Information System (AIS) is a structure that a business uses to collect, store,…

Q: explain the relationship of fi nancial statement elements and accounts, and classify accounts into…

A: Financial statements: Financial statements are condensed summary of transactions communicated in the…

Q: Explain Bill-and-hold concept.

A:

Q: What major types of items are reported in the retainedearnings statement?

A:

Q: What is the purpose of a subsidiary ledger?

A:

Q: Define Profi t and loss (P&L) statement

A: Introduction: The financial statement is a detailed analysis of the financial situation of the…

Q: Define Proprietorship

A: A form of an organization where a single person is the owner and controller of the business is known…

Q: Describe presentation and disclosure regarding revenue.

A: The core principle of IFRS 15 is that revenue is recognised when the goods or services are…

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.