1. The Jason Knife Co. purchased a machine on January 1, 2021. The machine cost $495,000. It had an estimated life of ten years, or 25,000 units, and an estimated residual value of $45,000. In produced 3,000 units. Jason Required: Compute the depreciation charge for 2021 using cach of the following methods: a. double declining balance b. units of output c. sum of the years' digits d. straight line
1. The Jason Knife Co. purchased a machine on January 1, 2021. The machine cost $495,000. It had an estimated life of ten years, or 25,000 units, and an estimated residual value of $45,000. In produced 3,000 units. Jason Required: Compute the depreciation charge for 2021 using cach of the following methods: a. double declining balance b. units of output c. sum of the years' digits d. straight line
Intermediate Accounting: Reporting And Analysis
3rd Edition
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Chapter11: Depreciation, Depletion, Impairment, And Disposal
Section: Chapter Questions
Problem 3RE: Albany Corporation purchased equipment at the beginning of Year 1 for 75,000. The asset does not...
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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.
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