cooling water pumping station at a manufacturing plant in Iligan City costs P30,000,000 to construct, and It is projected to have a 25-year life with an estimated salvage value of 10% of the construction cost. Calculate the annual depreciation charge for year 10 (d:0) using: Depreciation Method a) Straight Line Method b) Declining Balance Method c) Double Declining Balance Method
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 cooling water pumping station at a manufacturing plant in Iligan City costs P30,000,000 to construct, and It is projected to have a 25-year life with an estimated salvage value of 10% of the construction cost. Calculate the annual
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