Thompson table company purchased assembly machine. The invoice price of the machine was $3,000 plus freight of $150. Terms of the purchase granted a discount of $60 if Thompson paid in cash within 10 days, but the firm was short of cash and decided to wait until the bill was due and pay the full amount. The new machine recorded at a cost of...... a. $3,000 b. $3,150 c. $3,090 d.$2,940
Thompson table company purchased assembly machine. The invoice price of the machine was $3,000 plus freight of $150. Terms of the purchase granted a discount of $60 if Thompson paid in cash within 10 days, but the firm was short of cash and decided to wait until the bill was due and pay the full amount. The new machine recorded at a cost of...... a. $3,000 b. $3,150 c. $3,090 d.$2,940
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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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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Thompson table company purchased assembly machine. The invoice price of the machine was $3,000 plus freight of $150. Terms of the purchase granted a discount of $60 if Thompson paid in cash within 10 days, but the firm was short of cash and decided to wait until the bill was due and pay the full amount. The new machine recorded at a cost of......
a. $3,000
b. $3,150
c. $3,090
d.$2,940
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