A machine has a first cost of Php 13,000.,an estimate life of 15 years, and an estimated salvage value of Php 1,000. Using SLM, find a) the annual depreciation charged. b) the annual depreciation rate expressed as percentage of the first cost c) the book value at the end of 9 years.
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 machine has a first cost of Php 13,000.,an estimate life of 15 years, and an
estimated salvage value of Php 1,000. Using SLM, find a) the annual
percentage of the first cost c) the book value at the end of 9 years.
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