Suppose that a company purchases a computer to be used in the manufacturing department at the beginning of 2019. The price paid is 4.800 TL. The useful life of the computer is 4 years. Let's assume that the company employs accelerated method of depreciation in annual terms. What would be the journal entry regarding the depreciation at the end of 2019? What if the company switches to the straight-line method at the beginning of 2020? What would be the journal entry regarding the depreciation at the end of 2020 then?

Suppose that a company purchases a computer to be used in the manufacturing department at the beginning of 2019. The price paid is 4.800 TL. The useful life of the computer is 4 years. Let's assume that the company employs accelerated method of depreciation in annual terms. What would be the journal entry regarding the depreciation at the end of 2019? What if the company switches to the straight-line method at the beginning of 2020? What would be the journal entry regarding the depreciation at the end of 2020 then?

Name: Suppose that a company purchases a computer to be used in the manufac
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Description: Suppose that a company purchases a computer to be used in the manufacturingdepartment at the beginning of 2019. The price paid is 4.800 TL. The useful life of thecomputer is 4 years. Let's assume that the company employs accelerated method ofdepreci

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Concept explainers

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.

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Question

Suppose that a company purchases a computer to be used in the manufacturing
department at the beginning of 2019. The price paid is 4.800 TL. The useful life of the
computer is 4 years. Let's assume that the company employs accelerated method of
depreciation in annual terms. What would be the journal entry regarding the depreciation at
the end of 2019?
What if the company switches to the straight-line method at the beginning of 2020? What would be
the journal entry regarding the depreciation at the end of 2020 then?

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