Talia's tutus bought a new sewing machine for $55000 that will be depreciated over 5 years using double-declining balance depreciation with a switch to a straight line 1. Find the appreciation charge for year 1, year 2, year 3, year 4, and year 5 2. If the sewing machine is sold after 3 years for $25000 what will be the after-tax proceeds on the sale if the firm's tax bracket is 35%
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.
Talia's tutus bought a new sewing machine for $55000 that will be
1. Find the appreciation charge for year 1, year 2, year 3, year 4, and year 5
2. If the sewing machine is sold after 3 years for $25000 what will be the after-tax proceeds on the sale if the firm's tax bracket is 35%
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