Suppose a $9,000 machine will be used for five years. At that time, the machine’s salvage value will be $1,500. It was placed in service January 1st of year 1. Please select either the straight-line (SL) or double-declining balance (DDB) method of depreciation and complete the following: 1. A full annual depreciation schedule for the useful life of the asset (please indicate which method you are using). 2. The journal entry to record the acquisition of the machine. 3. The journal entry to record the first month of depreciation on the machine.
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.
1.
Suppose a $9,000 machine will be used for five years. At that time, the machine’s salvage value will be $1,500. It was placed in service January 1st of year 1.
Please select either the straight-line (SL) or double-declining balance (DDB) method of
1. A full annual depreciation schedule for the useful life of the asset (please indicate which method you are using).
2. The
3. The journal entry to record the first month of depreciation on the machine.
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