A factory equipment has an initial cost of P175,000. Its salvage value after 8 years is P18,000. As a percentage of the initial cost, what is the straiglt line depreciation rate of the equipment.
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.
A factory equipment has an initial cost of P175,000. Its salvage value after 8
years is P18,000. As a percentage of the initial cost, what is the straiglt line
The annual depreciation of P25,000 has been reserve for a machine for a
machine using straight line for 10 years. If the first cost is P300,000,
determine the salvage value of the machine.
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