A state owns a machine that produces license plates. Due to the required technological changes to the types of license plates. A new machine as much time to produce each license plate. The machine was purchased 30 ears ago for 300,000 and is depreciated on a straight line based for its 40 year useful life. A modern replacement for the machine costs 600,000. What is the amount of the impairment loss on the machine A 75,000 В 225,000 С 300,000 D 600,000
A state owns a machine that produces license plates. Due to the required technological changes to the types of license plates. A new machine as much time to produce each license plate. The machine was purchased 30 ears ago for 300,000 and is depreciated on a straight line based for its 40 year useful life. A modern replacement for the machine costs 600,000. What is the amount of the impairment loss on the machine A 75,000 В 225,000 С 300,000 D 600,000
Financial Management: Theory & Practice
16th Edition
ISBN:9781337909730
Author:Brigham
Publisher:Brigham
Chapter11: Cash Flow Estimation And Risk Analysis
Section: Chapter Questions
Problem 10P: St. Johns River Shipyards welding machine is 15 years old, fully depreciated, and has no salvage...
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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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