XY Company has recently purchased a computer system for its office. The following information was gathered in relation to the acquisition of the unit: List Price 152,000 Trade discounts and rebates taken 56,000 Installation and assembly cost 3,200 Initial delivery and handling cost 6,400 Purchase Discount 2%
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.
XY Company has recently purchased a computer system for its office. The following information was gathered in relation to the acquisition of the unit:
List Price 152,000
Trade discounts and rebates taken 56,000
Installation and assembly cost 3,200
Initial delivery and handling cost 6,400
Purchase Discount 2%
What is the acquisition cost of the new computer?
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