ABC Corp uses the 150% declining balance method to depreciate a machine purchased on Jan 1, 20X1 for P20,000. Estimated scrap value is P2,000 and estimated useful life is 4 years. What is the asset's carrying value at December 31, 20X2? (Round answer to nearest peso amount)
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.
ABC Corp uses the 150% declining balance method to
What is the asset's carrying value at December 31, 20X2? (Round answer to nearest peso amount)
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