Yellow Manufacturing Company purchased a machine for TL 1.000.000 on January 1 2020. Expected useful life of the vehicle is 5 years and estimated residual value is TL 30.000. Purple company is using Double Declining Balance Depreciation Method for this vehicle. Required: Prepare a table that shows depreciation expense of each year over the machine’s useful life What is this Machine’s accumulated depreciation at the end of 4 years? Journalize depreciation expense of this vehicle at the end of 5th year. Journalize sale transaction when this vehicle is sold for 300.000 TL at the end of 2 years. I WANT learn TO QUESTION 4th answers
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.
Yellow Manufacturing Company purchased a machine for TL 1.000.000 on January 1 2020. Expected useful life of the vehicle is 5 years and estimated residual value is TL 30.000. Purple company is using Double Declining Balance
Required:
- Prepare a table that shows depreciation expense of each year over the machine’s useful life
- What is this Machine’s
accumulated depreciation at the end of 4 years? - Journalize depreciation expense of this vehicle at the end of 5th year.
- Journalize sale transaction when this vehicle is sold for 300.000 TL at the end of 2 years.
I WANT learn TO QUESTION 4th answers
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