The following information was presented by User-Friendly Industries Company for an asset purchased at the beginning of the previous year Original cost of the asset $26,000 10 years $ 6,400 Useful life of the asset Annual operating profit, including depreciation Salvage value -0- What is the return on investment (ROI) assuming User-Friendly uses (a) the straight-line method for depreciation and (b) beginning-of-year net book values to compute RO? Multiple Cholce 11.1%. 24.6%. 27.4% 32.7%.
The following information was presented by User-Friendly Industries Company for an asset purchased at the beginning of the previous year Original cost of the asset $26,000 10 years $ 6,400 Useful life of the asset Annual operating profit, including depreciation Salvage value -0- What is the return on investment (ROI) assuming User-Friendly uses (a) the straight-line method for depreciation and (b) beginning-of-year net book values to compute RO? Multiple Cholce 11.1%. 24.6%. 27.4% 32.7%.
Century 21 Accounting Multicolumn Journal
11th Edition
ISBN:9781337679503
Author:Gilbertson
Publisher:Gilbertson
Chapter19: Accounting For Plant Assets, Depreciation, And Intangible Assets
Section: Chapter Questions
Problem 5AP
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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.
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