Coopers Industries purchased a block of land for use in its activities on January 1, 2019, by paying the seller $100,000 in cash and signing a five-year, 12% note due in the amount of $400,000. Coopers paid $19,000 in legal expenses, $25,000 in real estate agent commissions, $1,000 in surveying fees, and $5,000 in appraisal fees in connection with the land transaction. The land's purchasing
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.
Coopers Industries purchased a block of land for use in its activities on January 1, 2019, by paying the seller $100,000 in cash and signing a five-year, 12% note due in the amount of $400,000. Coopers paid $19,000 in legal expenses, $25,000 in real estate agent commissions, $1,000 in surveying fees, and $5,000 in appraisal fees in connection with the land transaction. The land's purchasing cost is.
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