Machinery costing P820,000 on 1 January and P940,000 on 31 December were reported at net of accumulated depreciation of P552,500 and P683,000 respectively. A machine acquired for P80,000 and carrying value of P32,000 was sold in the year. How much is the depreciation expense? Choices; P37,500 P39,000 P162,500
Machinery costing P820,000 on 1 January and P940,000 on 31 December were reported at net of accumulated depreciation of P552,500 and P683,000 respectively. A machine acquired for P80,000 and carrying value of P32,000 was sold in the year. How much is the depreciation expense? Choices; P37,500 P39,000 P162,500
Intermediate Accounting: Reporting And Analysis
3rd Edition
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Chapter11: Depreciation, Depletion, Impairment, And Disposal
Section: Chapter Questions
Problem 5MC: A machine with a 4-year estimated useful life and an estimated 15% residual value was acquired on...
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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.
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Machinery costing P820,000 on 1 January and P940,000 on 31 December were reported at net of accumulated depreciation of P552,500 and P683,000 respectively. A machine acquired for P80,000 and carrying value of P32,000 was sold in the year. How much is the depreciation expense?
Choices;
P37,500
P39,000
P162,500
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