Explanation Depreciation: When the value of asset falls with the passage of time due to reasons like wear and tear and for any other reason, it is called depreciation. Straight Line Method : When the fixed percent of depreciation is charged on the original cost of the asset it is known as the straight line method. Partial Period Assumption: When the asset is purchased on any date after the first of the month, the date of acquisition is considered to be middle of the month. This assumption is known as partial period assumption. Formula to calculate depreciation expense is as follows: Depreciation expense = Cost − Scrap value Useful life Substitute $384,000 for the cost, scrap value is nil and 16 for useful life in formula, Depreciation expense = $ 384 , 000 − 0

2nd Edition

ISBN: 9780134730370

Author: Elizabeth A. Gordon, Jana S. Raedy, Alexander J. Sannella

Publisher: PEARSON

See similar textbooks

Concept explainers

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 exp…

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…

Videos

Question

Chapter 11, Problem 11.13BE

To determine

The depreciation for first two years.

Given information:

Cost of oven is $384,000.

Useful life is 16 years.

Expert Solution & Answer

Want to see the full answer?

Check out a sample textbook solution

See solution

Chapter 11, Problem 11.12BE

Chapter 11, Problem 11.14BE

Students have asked these similar questions

Can you explain the correct methodology to solve this general accounting problem?

Question: Record an adjusting entry for beginning inventory in a general journal format for the following: • a.–b. Merchandise Inventory, before adjustment, has a balance of $8,800. The newly counted inventory balance is $9,300.• c. Unearned Seminar Fees has a balance of $5,500, representing prepayment by customers for five seminars to be conducted in June, July, and August 20X1. Two seminars had been conducted by June 30, 20X1.• d. Prepaid Insurance has a balance of $13,200 for six months’ insurance paid in advance on May 1, 20X1.• e. Store equipment costing $6,530 was purchased on March 31, 20X1. It has a salvage value of $530 and a useful life of five years.• f. Employees have earned $280 that has not been paid at June 30, 20X1.• g. The employer owes the following taxes on wages not paid at June 30, 20X1: SUTA, $8.40; FUTA, $1.68; Medicare, $4.06; and social security, $17.36.• h. Management estimates uncollectible accounts expense at 1 percent of sales. This…

can you give a journal entry, ledger,and adjustment entry about Laundry

Chapter 11 Solutions

Intermediate Accounting (2nd Edition)

Ch. 11 - Stephen J. Cosgrove is the Former Vice President....Ch. 11 - Prob. 11.2Q Ch. 11 - Prob. 11.3Q Ch. 11 - Prob. 11.4Q Ch. 11 - Will the expense/capitalization choice impact...Ch. 11 - Prob. 11.6Q Ch. 11 - Prob. 11.7Q Ch. 11 - For a long-lived operating asset acquired by...Ch. 11 - Prob. 11.9Q Ch. 11 - Prob. 11.10Q

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.

The depreciation for first two years. Given information: Cost of oven is $384,000. Useful life is 16 years.

Solution Summary: The author calculates the amount of depreciation for first year and second year, based on the straight line method and partial period assumption.