A super printer was acquired at the beginning of the year at a cost of $75,000 that has an estimated residual value of $10,000 and an estimated useful life of 5 years. It is estimated that the machine has an estimated 100,000 copies. This year 35,000 copy were made. Determine the annual depreciation expense for this year, using unit of production method? a. $15,000 b. $22,750 c. None of the answer is correct d. $13,000 e. $26,250
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 super printer was acquired at the beginning of the year at a cost of $75,000 that has an estimated residual value of $10,000 and an estimated useful life of 5 years. It is estimated that the machine has an estimated 100,000 copies. This year 35,000 copy were made. Determine the annual
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