What is the total depreciation for 2003 using Working Hours and Service Output Method?
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 corporation purchased a machinery for P100,000.00 with an estimated useful life of 10 years. See table below for the following data.
SCRAP VALUE PRODUCTION WORKING HOURS
P4,000.00 400,000 units 120000 working-hours
Year Production No. of Working-hours
2002 36,000 units 14,000
2003 44,000 units 18,000
What is the total
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