Depreciation means allocating the cost of the asset over its useful life. It matches the expenses against the revenue generated from the usage of asset to compute the net profit. The reason for applying the depreciation is wear and tear of assets; obsolesce of technology and usage of assets. Under straight line method of depreciation (SLM) depreciation remains the same in each year of assets. Depreciation under SLM can be computed with the help of formula shown below: s t r a i g h t l i n e d e p r e c i a t i o n = ( cos t − r e s i d u a l v a l u e ) / u s e f u l l i f e To determine: We have to determine and record both depreciation expense and sale of fixtures on May 31, 2016.

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Chapter 10, Problem E10.23E

To determine

Depreciation means allocating the cost of the asset over its useful life. It matches the expenses against the revenue generated from the usage of asset to compute the net profit. The reason for applying the depreciation is wear and tear of assets; obsolesce of technology and usage of assets.

Under straight line method of depreciation (SLM) depreciation remains the same in each year of assets. Depreciation under SLM can be computed with the help of formula shown below:

$s t r a i g h t l i n e d e p r e c i a t i o n = (\cos t - r e s i d u a l v a l u e) / u s e f u l l i f e$

To determine:

We have to determine and record both depreciation expense and sale of fixtures on May 31, 2016.

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