Matlock inc .acquires a delivery at cost of $50000 on January 1,2022. The truck is expected to have a salvage value of $28000 at the of its 5 years useful life assuming the decline balance depreciation rate is double straight line rate ,compute annual depreciation for the first and second years under the 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.
Matlock inc .acquires a delivery at cost of $50000 on January 1,2022. The truck is expected to have a salvage value of $28000 at the of its 5 years useful life assuming the decline balance
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