Company A bought a building for OMR.73,000, which has the expected useful life of eight years and a residual value of OMR.4,000 at the end of that time. If depreciation is to be provided using the Straight-line method, the net book value after two years will be: A) OMR. 55750 B)OMR. 44160 C)OMR. 54750 D)OMR. 49285
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.
Company A bought a building for OMR.73,000, which has the expected useful life of eight years and a residual value of OMR.4,000 at the end of that time.
If
- A) OMR. 55750
B)OMR. 44160
C)OMR. 54750
D)OMR. 49285
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