What depreciation would Murgatroyd record for the year 2018 on this equipment
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.
On January 1, 2016 Murgatroyd Co. purchased equipment for OMR 30,000, estimating a four-year useful life and no residual value. In 2016 and 2017, Murgatroyd
Trending now
This is a popular solution!
Step by step
Solved in 2 steps
