The following data relate to store equipment of Swift Company: January 1,2021 December 31, 2021 Store equipment ------------------P900,000 ----- 1,200,000 Accumulated depreciation ------- 140,000 ------ 160,000 Store equipment costing P70,000 was sold for P30,000, resulting in a loss of P3,000. How much is the depreciation expense on store equipment for the year 2021?
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 following data relate to store equipment of Swift Company:
January 1,2021 December 31, 2021
Store equipment ------------------P900,000 ----- 1,200,000
Store equipment costing P70,000 was sold for P30,000, resulting in a loss of P3,000. How much is the depreciation expense on store equipment for the year 2021?
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