The cost of acquisition of the asset is 90 000 leva. The residual value is 30 000 leva. The useful life is 5 years. The asset (a manufacturing machine) was introduced into operation on September 30th, 2015. Calculate and show in a table the depreciation expense for each of the periods (years) within the useful life – 2015, 2016, 2017, 2018, 2019, and 2020, under the double-declining balance method and coefficient of acceleration 2.
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.
The cost of acquisition of the asset is 90 000 leva.
The residual value is 30 000 leva.
The useful life is 5 years.
The asset (a manufacturing machine) was introduced into operation on September 30th, 2015.
Calculate and show in a table the
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