1. A machine has a cost of $17,100, an estimated residual value of $4,020, and an estimated service life of seven years. The machine is being depreciated on a straight-line basis. At the end of the second year, what amount will be reported for accumulated depreciation? (Do not round your intermediate calculations. Round annual depreciation amount to the nearest dollar amount.) Multiple Choice $1,869 $3,737 $13,363 $4,886
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.
T1.
A machine has a cost of $17,100, an estimated residual value of $4,020, and an estimated service life of seven years. The machine is being
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