Rodgers Company purchased equipment and these costs were incurred: Cash price $55,000 Sales taxes 3,600 Insurance during transit 640 Installation and testing 860 Total costs $60,100 Group of answer choices $55,000 $58,600 $59,240 $60,100
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.
Rodgers Company purchased equipment and these costs were incurred:
Cash price $55,000
Sales taxes 3,600
Insurance during transit 640
Installation and testing 860
Total costs $60,100
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