The cost of equipment purchased by Oriole, Inc., on June 1, 2025, is $90,300. It is estimated that t $6,300 salvage value at the end of its service life. Its service life is estimated at 7 years, its total w and its total production is estimated at 600,000 units. During 2025, the machine was operated 7,2 produced 66,550 units. During 2026, the machine was operated 6,655 hours and produced 58,00 Compute depreciation expense on the machine for the year ending December 31, 2025, and the y using the following methods. (Round depreciation per unit to 2 decimal places, e.g. 15.25 and final ans a. Straight-line b. Units-of-output C. Working hours $ 2025 7000 9310 14520 $ $ $ 2026 120 00 133
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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