Three joint operators are involved in a joint operation that manufactures ships chandlery. At the beginning of the year the joint operation held P50,000 in cash. During the year the joint operation incurred the following expenses: Wages paid P20,000, Overheads accrued P10,000. Additionally, creditors amounting to P40,000 were paid and the joint operators contributed P15,000 cash each to the joint operation. The balance of cash held by the joint operation at the end of each year is:
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.
Three joint operators are involved in a joint operation that manufactures ships chandlery. At the beginning of the year the joint operation held P50,000 in cash. During the year the joint operation incurred the following expenses: Wages paid P20,000,
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