Takatak, Inc., uses the group depreciation method for its furniture account. The depreciation rate used for furniture is 21%. The balance in the furniture account on December 31, 2017, was P125,000, and the balance in Accumulated Depreciation-Furniture was P61,000. The following purchases and dispositions of furniture occurred in 2018 (assume that all purchases and disposals occurred at the beginning of each year). Assets Sold Assets Purchased Cost Selling Price P35,000 P27,000 P8,000 The carrying amount of furniture at December 31, 2018 is ?
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.
Takatak, Inc., uses the group
21%. The balance in the furniture account on December 31, 2017, was P125,000, and the balance in
Depreciation
that all purchases and disposals occurred at the beginning of each year).
Assets Sold
Assets Purchased Cost Selling Price
P35,000 P27,000 P8,000
The carrying amount of furniture at December 31, 2018 is ?
Trending now
This is a popular solution!
Step by step
Solved in 2 steps
