Given a cost of a depreciable fixed asset of $24,000 with a salvage value of $2,000 and a life of 5 years, what is the annual depreciation of the fixed asset using the straight-line method?  What would be the depreciation in the second year if it used the declining balance method at double the straight-line rate? In regards to question #1, if the company used the straight-line method and sold the asset after 4 years for $7,000, what would be the journal entry needed to record the transaction?  What if they sold it for $5,000?

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A: a. Sum of year digit method:

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A:

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A: When the asset's market value changes then it gives revaluation loss or revaluation surplus.

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A:

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A: Straight-line depreciation per year=Cost of asset-Salvage valueUseful life

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A:

Q: depreciation expense for year 3 would be

A: Compute the depreciation expense per year.

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A:

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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.