The balance sheet data of Blossom Company at the end of 2025 and 2024 follo Cash Accounts receivable (net) Inventory Prepaid expenses Equipment Accumulated depreciation-equipment Land Accounts payable Accrued expenses 2025 $30,100 55,000 64,600 15,000 90,200 (18,040) 70,200 2024 $35,100 14,800 44,900 45,100 24,700 74,500 (8,000) 39,800 $307,060 $256,100 $64,600 $52,500 14900

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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.